08 Jan 2020
Posted in Consumer
Greggs must adapt if it is to enter the arena amongst business heavyweights
Following recent news that Greggs is offering a substantial end-of-year bonus to all of its employees following a stellar year with record-breaking growth, Hakan Demirci, Consumer Analyst at GlobalData, a leading data and analytics company, offers his view:
“News that Greggs has offered its 19,000 employees a share of a £7m bonus pay out comes as no surprise, especially following its stellar performance over 2019. GlobalData notes that Greggs saw an 11% increase in sales in 2019 with revenues up to $1.373bn*, reversing the trend of gradual decline that is seemingly affecting most other high street retailers.
“This same year saw Gregg’s share price rise by 80% to £23 on the London Stock Exchange, providing great returns for investors and shareholders alike. If Greggs is able to replicate the successes of 2019 through further product innovation and savvy marketing, it could soon see itself graduating into the FTSE 100. This would put it in a similar league of companies in highly profitable sectors such as finance and technology.
“Nevertheless, there is a danger that the overwhelming success of Gregg’s vegan range could lead it into complacency on its product innovation front. Moreover, whilst the firm has announced plans to open a further 100 stores across the UK, for it to be considered a heavyweight in British industry, there must be evidence of plans for further growth.
“If Greggs seeks to become an industry heavyweight, it should capitalize on its successes, investing further profits into research and development (R&D) to keep itself on the periphery of food innovation. Moreover, as Greggs stores fill up the UK, its focus should be towards overseas expansion, with similar markets such as the Republic of Ireland serving as an attractive option.”
*GlobalData Consumer IC – Companies