Greggs' Menu Expansion Fuels Growth Amid Sausage Roll Dominance

Greggs has achieved remarkable growth, surpassing £2 billion in revenue last year, driven primarily by increased sales of pizzas, chicken goujons, and potato wedges. Despite this success, the classic sausage roll remains the company’s best-selling item. The firm, historically focused on baked goods, is expanding its menu as part of its ambitious growth strategy. Evening sales have also surged as Greggs shifts focus from traditional High Street locations to more accessible venues like train and bus stations.

Although Greggs reported an 8.3% rise in pre-tax profit to £204 million in 2024, sales fell short of expectations, sparking a 12% drop in share prices. This downturn is attributed to the ongoing cost of living crisis, with consumers grappling with rising energy prices and housing costs. The company has expressed concerns regarding the government’s increase in employer National Insurance contributions, suggesting potential price hikes to cover these additional expenses.

CEO Roisin Currie emphasized that while hot food items, particularly pizza deals, are gaining popularity, Greggs will continue to prioritize its core savoury baked goods, which account for a significant portion of sales. The company opened 145 new shops last year and has been successful in diversifying its locations, with nearly half of its shops now situated in non-traditional settings, including petrol stations and retail parks.

In addition to physical expansions, Greggs has reported an uptick in sales through delivery services and a growing customer base using its mobile app. Analyst Mamta Valechha from Quilter Cheviot remains optimistic about the company’s future, noting the strong position of Greggs due to its strategic plans for new shop openings, menu diversification, extended trading hours, and enhanced digital engagement. These efforts may help mitigate challenges facing the retail sector.