November 20, 2017

Greggs: Everyday Tastes Good

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My name is Charlie Bingham and I started the full-time MBA at Heriot-Watt University in September 2017. Over the past 19 years since graduating in Business Studies and French, I have lived and worked in the UK, Brussels, Belgium and most recently Houston, Texas. Most of my roles have been at a General Management level in the hospitality and property industry. I decided to do an MBA to complement my business experience and most importantly to get me ready to start my own business.

I chose Heriot-Watt University due to the entrepreneurial focus of the course. It combines theoretical teaching with extensive examples from business and features interaction with many companies. By hearing from fellow entrepreneurs who are just starting their journey, and from more established companies, it is an ideal way of gaining insight into strategies that have worked and those that have not. In addition, I am studying with students from across the world (14 countries in all) with different experiences and business ideas – we learn a lot from one another. This blog features a recent visit to an established company in the UK that has been on a recent business transformation.

The Full-Time MBA Students pictured outside Greggs’ HQ

On 29 September 2017, the full-time MBA students travelled to Newcastle to visit the UK’s leading bakery food-on-the-go retailer Greggs. We were given a business overview presentation by Lisa Brigham and Duncan Smith from the Corporate Team before being taken on a tour of the immense sausage-roll-making facility, just a 10-minute walk from Head Office.

A few years ago, Gregg’s sales were in decline; what was its identity and market position, and how could it compete with the high-street market leaders such as Subway, Starbucks and others? A new CEO, Roger Whiteside, with M&S grounding, was appointed in 2013 and significant changes were implemented. Over recent years, his strategy has moved the company from being a high-street bakery business to a food-on-the-go business; this included changes to the menu with a focus on good value, high quality and speedy breakfast choices and Balanced Choice (a healthier menu option). The shop environment was improved and significant investments were made in logistics and delivery systems to make them more efficient. In-store ordering moved to a centralised forecast and replenishment system rather than relying on shop teams filling in manual order forms, which resulted in order accuracy and improved availability for customers. All shops are on a refurbishment programme (every seven years) to ensure they stay looking bright and welcoming. In-store point of sale and window displays remain key to Greggs’ marketing strategy, however, a loyalty app was also introduced in 2014.

The technology witnessed in the savoury-making facility, including the iconic sausage roll, was impressive – a production line costing £20m produces 3.5m sausage rolls per week which are delivered from Newcastle to stores across the UK. This has significantly impacted product consistency and all products should be the same high quality, whether in Devon or in their newest market, Northern Ireland.

Since 2013, sales and profits have grown and today the company is valued at £1.2bn. Breakfast is now their busiest trading period and the company are trialling Drive-Thru. There is a strong focus on the community – whether through donating unsold food to homeless shelters or raising over £10m for Children in Need over the past 10 years. You can sense that there is a strong corporate culture and all the employees we met were long serving; there is also a real affinity with what goes on in the stores.

The Full Time MBA students learn about Greggs’ products during their study visit to Greggs’ manufacturing plant in Newcastle.

The company appears to have successfully embraced the changes that were necessary and is in a strong position to continue to increase market share and compete with the other established players. It was a most enlightening and informative day and shows what a successful strategic plan can achieve in a relatively short period of time…

In summary, this visit taught me a lot about the importance of changing strategy and making bold decisions when the financials are not going in the right direction. At the time of writing, after five weeks of study we have met or visited seven different companies of all sizes and business contexts. Many other visits and presentations are scheduled and when we spend six weeks at Heriot-Watt’s Dubai campus in January/February 2018, this schedule will continue. Company visits are already planned to DP World, Abu Dhabi Commercial Bank, Emirates, and Silicone Oasis.

I am excited to see what more I can learn from these and other company insights over the next 10 months.

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