Bakery chain Greggs has twice as many UK locations as Starbucks, and this is no accident. The company has a unique location strategy involving the seemingly counter-intuitive decision to open several outlets in close proximity to each other. It has also focused its effort on placing stores in popular transport hubs to attract a high number of customers. So, why is this location strategy so successful?
Only a few years ago, Greggs faced profit losses thanks to a PR crisis surrounding the quality of its goods and prejudicial stories about the kinds of people who purchased products from its stores. Since then, however, it has come to be known as the largest bakery chain in the UK and has successfully reversed its negative image.
The potential reasons for this reversal of fortunes are complex. Greggs’ marketing strategy, for example, could be praised for its repositioning of the company from a run-of-the-mill local bakery to the go-to lunch venue for office workers, labourers, and school kids alike. The chain has also come to be known as one of the few high street stores that endeavours to treat its workers well, something which could attract socially-conscious consumers.
The key factors at play in Greggs’ success, however, are due to its location strategy.
You’re always close to a Greggs
First things first, it is important to understand why so many of Greggs’ 1,600 stores are often positioned so close together.
Remember that Greggs’ primary offering is food-to-go. Faced with a plethora of other choices, hungry workers looking for lunch will often simply head to the closest place they can get their hands on a sandwich or pasty. The more stores there are, the more likely people will purchase from Greggs.
Greggs makes up for reduced footfall on the high street
As online shopping has grown in popularity, the number of people hitting the streets has reduced and many physical stores have been hit hard in financial terms. To combat this, Greggs have opened stores in places they know will receive consistent foot traffic. This includes universities, train stations, and so-called ‘travel hubs’.
Greggs are careful about where they open
Although most UK high streets feature a number of Greggs stores, the chain is most prevalent in the north of England. This is because it has built up a base of loyal customers here and continues to deliver excellent services to the area. In the southwest, however, where pasties are somewhat of a local delicacy, few Greggs chains have opened up. This is because the company are aware that the consumer base will be more difficult to impress.
So, the location strategy pursued by Greggs is smarter than it may first appear. As such, the chain is sure to stay strong well into the future.
It’s clear that insight into location is critical to Greggs’ success. The location intelligence platform Periscope® can yield these sorts of insights – and many more – for your organisation too.