Greggs, one of the UK's most popular bakery chains, has expanded its production lines to meet growing demand for its sausage rolls, vegan bites, and other baked treats. However, some analysts are questioning whether the company's rapid expansion is overbaking its growth prospects.
The Newcastle-based factory, which produces 1 million sausage rolls every day, recently gained a fourth production line, with plans to launch automated production sites in Derby and Kettering next year. The estimated capital expenditure for these new factories is £300m. While the company's determination to expand its store count remains unwavering, some analysts have raised eyebrows about its strategy.
Roisin Currie, Greggs' CEO, has insisted that the company has not reached peak demand, citing previous recoveries from downturns as evidence. However, others are more skeptical. Panmure Liberum analysts have described Greggs as "at a crossroads," suggesting that the chain may be near its limit of growth.
Despite this, Greggs remains popular among customers in Newcastle and other locations, where fans queue up outside branches to buy breakfast sandwiches and coffee. The company's reputation for quality and value has been sustained through social media marketing campaigns, which have contributed to its success.
However, some analysts have questioned whether the chain can sustain growth through new branch openings, particularly if they are too close to existing sites. Peter Backman, a restaurant consultant, has suggested that Greggs may be nearing its maximum number of stores.
In an effort to adapt to changing consumer behavior and trends, Greggs is also exploring new formats, such as smaller shops in high footfall locations, known as "Bitesize Greggs." The company's annual pop-up venue, a "Greggs pub" inside Newcastle's Fenwick department store, has been successful, with customers booking out to enjoy its products in a traditional setting.
The key question now is whether Greggs can maintain momentum and continue to grow without overextending itself. With the announcement of festive sales figures on January 8th, the company will need to demonstrate that it has a solid strategy for future growth, rather than simply banging out reassurances about its current performance.
The Newcastle-based factory, which produces 1 million sausage rolls every day, recently gained a fourth production line, with plans to launch automated production sites in Derby and Kettering next year. The estimated capital expenditure for these new factories is £300m. While the company's determination to expand its store count remains unwavering, some analysts have raised eyebrows about its strategy.
Roisin Currie, Greggs' CEO, has insisted that the company has not reached peak demand, citing previous recoveries from downturns as evidence. However, others are more skeptical. Panmure Liberum analysts have described Greggs as "at a crossroads," suggesting that the chain may be near its limit of growth.
Despite this, Greggs remains popular among customers in Newcastle and other locations, where fans queue up outside branches to buy breakfast sandwiches and coffee. The company's reputation for quality and value has been sustained through social media marketing campaigns, which have contributed to its success.
However, some analysts have questioned whether the chain can sustain growth through new branch openings, particularly if they are too close to existing sites. Peter Backman, a restaurant consultant, has suggested that Greggs may be nearing its maximum number of stores.
In an effort to adapt to changing consumer behavior and trends, Greggs is also exploring new formats, such as smaller shops in high footfall locations, known as "Bitesize Greggs." The company's annual pop-up venue, a "Greggs pub" inside Newcastle's Fenwick department store, has been successful, with customers booking out to enjoy its products in a traditional setting.
The key question now is whether Greggs can maintain momentum and continue to grow without overextending itself. With the announcement of festive sales figures on January 8th, the company will need to demonstrate that it has a solid strategy for future growth, rather than simply banging out reassurances about its current performance.
. Like, they've been killing it in the UK bakery scene, no doubt, but have they thought this through? 
They're talking £300m for new factories and expanding their store count, which sounds like a solid plan on paper... but what if it's too much to handle? 
I mean, Panmure Liberum saying they're at a crossroads is not something to be taken lightly. What if they overdo it and then struggle to keep up with demand? 
And those Bitesize Greggs shops in high footfall locations? Cool idea, but will they be able to make it work if the new factories are too big? 
And it costs £300m to do so... that's a lot of cash. 
But seriously, is this really sustainable? I've been to some of their Bitesize Greggs in high footfall locations and those are actually pretty cool, but I'm worried they're just going to end up with too many shops everywhere. It feels like they're trying to chase the trend rather than listen to what customers want. 
They're always saying "we're not at peak demand yet" but how many times have we seen this happen before? It's like they're caught in a loop of expansion and growth expectations... 
And what about the environmental impact of all these new factories?! £300m is a pretty penny. Shouldn't they be focusing on sustainability over just adding more sausage rolls to their menu? 
they should def consider those bitesize shops, that sounds like a genius idea 
. And what if new branch openings don't translate to sales growth? They need to be careful not to overcommit themselves 
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, but have they bitten off more than they can chew? 
With the new factories popping up all over the place, it's like they're trying to out-bake themselves 
. What if demand does finally peak, but by then it'll be too late to make any significant changes? And those analysts are spot on about Greggs being at a crossroads 
. They need to prove that their growth strategy is more than just a bunch of hype 
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, but can they replicate that success with brick-and-mortar stores? I'm not convinced 
they've got a good rep and all, but if they start popping up everywhere it's hard to maintain that quality vibe 