Greggs: The low-cost bakery that took over Britain

Mass popularity has been a long time coming for the chain, which last week rewarded staff with a £300 ($390) bonus after another string of successful returns. Greggs started life in Tyneside, a former center for heavy industry in northeast England, in 1939, and was a forgettable fixture on a select number of UK main streets just a decade ago.

But with an unusual and relentless marketing campaign and a shift towards healthier products that appeal to wealthier customers, the company has reinvented itself.

“People want to be associated with Greggs,” says Sara Collinge, managing director of marketing consultancy Don’t Cry Wolf. “It’s incredible to think that just a few years ago they were a beleaguered business that was really struggling to keep up with other … chains like Subway.”

Has Greggs conquered Britain?

“Young people, especially, love Greggs,” says student Holly McManus — and she would know. A year ago, McManus set up an online Greggs appreciation group for fellow University of Liverpool attendees that now has more than 400 members.

“Go to Greggs have a pastry” is the straightforward mantra on the community’s Facebook page. It’s embraced by students across the United Kingdom.

“There’s two Greggs on our campus and at lunch times the queue always goes out the door and far down the street,” says McManus, who estimates that she eats at Greggs twice a week.

The company’s low prices are a big driver of its popularity, helping its products to become a staple for younger Brits. The vice president of McManus’ group says the “ritualistic daily routine of a sausage roll at break time” while attending school was his “first true experience of culinary independence.”

In 2017, a Birmingham university student jokingly wrote on Greggs’ Facebook page asking to host a party at one of its stores; in a cunning PR move the company accepted, temporarily turning an outlet into a nightclub and enjoying days’ worth of publicity.

But the company isn’t just a young person’s obsession. According to YouGov, it’s risen to the top spot among Britain’s most popular food brands. Boasting acceptance across numerous demographics, the polling firm says Greggs is well liked by millennials and boomers alike.

The ‘PC-ravaged clowns’ are on a roll

Nothing gets Britain talking like a vegan sausage roll.

When Greggs launched the plant-based alternative to its most popular product last year, it caused a firestorm of excitement and controversy that even the most optimistic marketing team couldn’t have expected.

Many hailed its arrival, with the general consensus on social media being that the product tasted about as good as the meat option. The Guardian said the roll provided “a chance for a divided country to heal itself.”

“They democratized vegan food, making it accessible for more people, bringing it onto high streets in the country,” Collinge says. “They took plant based food out of its vegan enclaves and hit the mainstream.”

Others stoked controversy. “Nobody was waiting for a vegan bloody sausage, you PC-ravaged clowns,” Piers Morgan said on Twitter — to which Greggs replied, “Oh hello Piers, we’ve been expecting you.”

“Greggs is really aware of trends in foods, consumer trends, and it’s got very good marketing. It’s got a friendly, fun image that people can really engage with,” says Maureen Hinton, global retail research director at GlobalData.

“Piers Morgan helped a great deal by moaning about it,” Hinton admits. But the company was already on the right track. “They were forward thinking,” she says. “Ethics, sustainability and governance are becoming really big issues for retailers and it seems to have tapped into that really well.”

For its encore, Greggs launched a vegan steak bake this month — unveiled with a flashy online trailer. And, in a perfectly proportional response, British consumers lined up in the cold at 10 p.m. to get a first taste.

Both vegan products feature Quorn, a meat substitute that gets its protein content from a fermented fungus.

PR still Greggs’ bread and butter

Greggs faces fierce competition, at least in London, from chains such as Pret a Manger and Costa Coffee, which have grown rapidly in recent years by offering sandwiches, salads and coffee (as well as pastries and cakes).

But rather than emulate their models, Greggs stuck to low-cost, traditionally British products, which include the popular £1.75 ($2.30) sausage roll while simultaneously targeting new, middle-class customers in cities in southern England.

The strategy has worked; now, the hottest chain in the country is planning to open 100 new outlets in 2020. With shares up dramatically, Greggs is also on the cusp of joining the United Kingdom’s benchmark FTSE 100 index.

“It might be surprising to some that Greggs is doing so well, given that it sells ‘off-message’ products, perceived as unhealthy,” says Tim Denison, the director of retail intelligence at Ipsos Retail Performance.

“The age-old basics of retailing are still very relevant though. Location is key — Greggs has been very astute in finding honey-pot spots, that may not have been considered as traditional retail locations.”

But store placement and vegan products aren’t the secret to Greggs’ success, say experts: its true power lies in marketing.

“What they did incredibly successfully was stop focusing on their products and started focusing on their brand,” Collinge explains. “They absolutely know their audience.”

“They get it,” says Collinge. “They get the self-deprecating British humor, they know they can poke fun at people, but the main thing they do is poke fun at themselves, which works incredibly well.”

Can Greggs get bigger?

Greggs has its roots in World War II, but the company’s rise to the top ranks of British brands only began in the past decade, when new management inherited a business that had been hit hard by the global financial crisis.

“The thing that people misinterpret in the UK market is that if it’s low price it must be low quality,” Greggs CEO Roger Whiteside told The Telegraph last year. “But customers are wising up to that because of what I call the Aldi/Lidl effect. Low price doesn’t have to be low quality.”

But experts also see challenges for Greggs in explaining its story to consumers outside the United Kingdom.

“That’s one of the reasons they haven’t expanded internationally — they know that what they have is special and it really works for this market, whereas it doesn’t necessarily translate,” says Collinge.

“I don’t know if it’s one of those businesses you can open abroad,” Hinton concurs. “It’s quite British in its personality.”

Hinton also questions how long its dedication to low prices can continue. “How far can you expand and keep the growth going without the cost becoming too overwhelming? Physical stores and having to employ people is becoming more costly, especially as the living wage is going up,” she adds.

But with excitement over its vegan range and its colorful marketing campaigns, Greggs has, at least, cooked up a storm in Britain, even if its vegan offerings continue to produce controversy.

“People now expect brands to be bold, and stand for something,” Collinge concludes. “If you’re not upsetting someone, you’re not doing it right.”