Greggs recently announced that it plans to reopen 800 stores across the UK for takeaway orders by June 18. While this news will surely have many Brits buzzing with excitement, it also raises some challenges; for a chain that climbed to success through cheap, on-the-go breakfast and lunchtime positioning, it may prove difficult to capture an evolving consumer base that has largely withdrawn into the home space amid the COVID-19 pandemic, says GlobalData, a leading data and analytics company.
According to the company’s latest COVID-19 adjusted updates, the UK’s restaurant industry is set to recover to 2019 levels by 2021 with a promising forecast-value of £33,323m*. However, this is only after suffering heavy losses over the course of 2020 that will dramatically reshape aspects of the UK’s current dining culture.
Carmen Bryan, Consumer Analyst at GlobalData, comments: “To offset the damages from 2020, Greggs must do what it can to become as accessible as possible. Physically small premises, as are many of Greggs outlets, will be a difficult hurdle to overcome, particularly if the two-meter rule is maintained. This may lead to increased reliance on app-based and automated solutions that offer quick and seamless customer interactions and limit in-store time.”
Notably, Greggs’ stores will not be accepting physical cash payments as part of its COVID-19 prevention measures. This plays into a growing preference for contactless solutions, with *259% of consumers in the UK stating that they prefer using card payments. While it seems like only a small change, it may usher in a new era of digital currency in the UK, as even consumers not familiar with such payment types must become accustomed to it under the current circumstances.
Bryan adds: “A barrier remains in the UK’s willingness to adopt contactless payment technologies. Unlike some other markets, which have already made a seamless transition to contactless societies, many older generations prefer simple and traditional offerings. Should consumers prove averse to these solutions, operators such as Greggs may struggle to achieve a steady flow of sales throughout 2020.”
The brand is driving a click-and-collect and delivery format that, in the long-term, could lead to an end to its dine-in services altogether. Initially, much of Greggs patrons were office workers or students. However, as these consumers grow accustomed to working from home, there will be less need for casual outlets such as Greggs to operate an obsolete seating area, particularly while only one person is permitted on premise.
Bryan concludes: “Ultimately, Greggs’ and other operators need to recognize and adapt their business models to the ‘new convenient’ – delivery, efficiency and safety. Greggs’ immense success came from leveraging the dominant trends of the 2010s that are now under threat as consumers adopt a more home-centric lifestyle. What’s interesting is how the company’s social distancing policies could reflect a new normal for foodservice going forward.”
*GlobalData’s COVID-19 Impact Market Model – Foodservice – June 12 Update
*2GlobalData’s Coronavirus (COVID-19) Tracker Consumer Survey – Week 10 – UK