Greggs CEO: Brand Popularity Drives Sales Amid Eased Inflationary Pricing

Greggs has credited the strength of its brand for the "robust" increase in like-for-like sales, as its pricing returns to normal levels after recent inflation.

In 2023, Greggs experienced a 13.7% rise in like-for-like sales compared to the previous year. The bakery chain noted that as the year progressed, the contribution from pricing inflation towards this sales growth diminished.

The company reported "increased transaction numbers and decreased impact from price inflation" in the fourth quarter. Like-for-like sales rose by 9.4% compared to the same period in 2022, showcasing the popularity of the Greggs brand, according to CEO Roisin Currie.

According to figures from YouGov's BrandIndex platform, Greggs' index score for overall brand health has increased from an average of 25.4 last year to an average of 26.2 this year (ending 9 January 2024). In March last year, Currie stated that Greggs' brand health was at an 'all-time high' in 2022, but according to BrandIndex, it seems to have improved even further since then.

Greggs’ buzz metric, indicating positive brand awareness, has risen to 12.8 from 11.6 last year. The company has noted that the effects of inflationary pricing are decreasing, yet there has been a slight decrease in consumer perception of value from 37.7 to 37.2. Despite this, perceptions of quality have improved from 18.1 to 18.7 in the past year.

Currie credited the brand's popularity to the company expanding its range and increasing accessibility through digital platforms and extended opening hours, both of which have been ongoing priorities for the brand.

As of the end of 2023, 710 Greggs stores were integrated into the Uber Eats platform, offering consumers the option to order delivery. The brand also maintained its partnership with Just Eat for delivery services.

In the past year, the brand expanded by opening 220 new shops and closing 75 (33 of which were complete closures and 42 were relocations). This expansion is intended to make Greggs more easily accessible to customers. The brand has expressed confidence in achieving significant progress this year, although it also identified wage inflation as a challenge in 2024.

Starting in April of this year, the minimum wage for workers over 21 will rise to £11.44, up from the current rate of £10.42 per hour for workers over 23 and £10.18 per hour for workers aged 21 to 22. Greggs has confirmed that it pays all of its workers above the current national minimum wage, regardless of age. Even though Greggs sees wage inflation as a potential challenge, the company also believes that higher pay rates across the economy will help support consumer incomes.

Recent data from Hospitality Data Insights reveals that £2 out of every £100 spent in UK brick-and-mortar hospitality is allocated to Greggs. With the anticipation of a rise in consumer income, the brand is aiming for a boost in sales.