1.0 Introduction - Financial Performance and Expansion Plans of Greggs PLC
Greggs PLC business organization is the UK’s top bakery and it has more than 2,300 locations state. It was established in 1939, it has expanded from a small bakery in Newcastle to become the largest bakery company in the country. The company specializes in decadent products such as cold and hot beverages, gourmet bakery products, sausage rolls, sandwiches and desserts. To better serve customers, Greggs offers a variety of delivery, click-and-collect, in-store and drive-through options. The Company owns and operates franchised and Company-operated outlets that can be found at highway offices, highways, roadside outlets, and other suitable locations. Within the UK confectionery sector, the chocolate market is an important segment dominated by famous brands such as Cadbury, Galaxy and Maltese. Chocolate is a medically focused product with proven sustainability in uncertain economic times.
During the 2008 - 2009 crisis, sales constant to grow. But in early 2020, the COVID-19 pandemic brought a new unheard-of problem. Analysis of the business’s performance KPIs, financial performance, strategic developments and sentiment. Strong sales growth, store expansion, growth through digital channels, and investment in the supply chain are some of the highlights. The purpose of the report is to inform Gregg’s members of the company’s 2022 performances and future strategic direction. It wants clarity on project performance, growth plans and plans to achieve shareholder value and workable growth.
2.0 Discussion
2.1 Analysis of the financial performance data of Greggs PLC
Figure 1: Greggs PLC’s Income and Expenses Analysis
Greggs PLC have been able to produce a huge number of sales over the past few years as this above-mentioned figure suggests. It was found that Greggs PLC was able to produce a total number of 1512.8 million euros in the year 2021. Also, the pre-tax profit value of this specific organization was investigated at £148.3 million in that same year (Phimmavong et al. 2023). With the help of this above-mentioned figure it can be properly identified that the development of Greggs PLC’s profit after taxation value was 120.3 million euros which is 28 million euros less than the previous value and this income was calculated for the year 2022.
Profitability and returns
Figure 2: Profitability and returns of Greggs PLC
In the previous three years which are 2019, 2021 and 2022 the Greggs PLC business organization was able to produce more than 20% of capital return which is a very impressive stat. It was found that Greggs PLC’s capital return value was highest in the year 2021 which was 23.0% and in the year 2019, the annual capital return was 20.0% which was the lowest (Sibanda and Ramanathan, 2022). However, it can be identified with the help of this specific figure that the highest amount of sales was found in the year 2022 which was 1513 million euros.
The capital expenditure of Greggs PLC can be appropriately analyzed with the help of this particular image. It was found that this business organisations produced these expenditures based on the development of new shops in various new locations (King et al. 2021). It was found that in the year 2022, the Greggs PLC company’s total expenditure was calculated at 110.8 million euros. However, it can be examined with the help of this calculation that this organization wanted to utilize 200 million euros for their growth of a business environment in the year 2023.
2.2 Identification of Greggs PLC’s organizational structure and strategy planning
This particular section of this entire research work contains the structural descriptions of the Greggs PLC organisations. Also, the analysis of Greggs PLC’s developmental strategies is mentioned in this part properly.
Organization structure of Greggs PLC
Figure 4: Greegs PLC’s brand strength analysis
In the entire bakery market industry of the United Kingdom, Greggs PLC was able to achieve a very high spot among the other organisations. It can be understood with the help of this graph that Greggs PLC was able to achieve the number one rank in the YouGov's Brand Index.
Supply chain management process of Greggs PLC
The supply chain management process of this particular company has also become one of the strongest points in its development process (Khan et al. 2022). The new supply chain management process of Greggs PLC includes the increase of 2500 shops to more than 3000 shops in the entire United Kingdom. With the help of their new supply chain management approach they wanted to redevelop their Birmingham location properly.
2.3 Growth scenario of Greggs PLC’s business environment
Capital investment plan identification
Figure 5: Capital investment plan for Greggs PLC’s growth
To support its support development strategy and expand the capacity of its supply chain, Greggs has set a major capital expenses strategy for the years 2022–2026. Increasing production is a high in the year of 2024 plan strategy. This includes building a fourth lane for gourmet foods and more space for cold storage. To improve its logistics, Greggs intends to build a new national distribution center and renovate two regional distribution centers (Elf et al. 2022). Investment in new company stores, relocations and renovations to expand retail assets will speed up to 160-180 units per year. Additional funds are allocated for capital investment in information technology and maintenance. A phased approach will see the offer increase from the current 2,300 stores to more than 3,000 stores. The aim is to allow Greggs to realize its multi-channel growth and develop into a much larger company. It is estimated that by 2023 and 2025 plans rewards will exceed £200 million.
Utilization of the Digital Channels
Greggs is using applications and other digital channels to increase sales, including Click+Collect as a delivery. The company’s partnership with Just Eat has expanded delivery to more than 1,270 stores, allowing customers to get their food delivered to their doorsteps (Revoredo-Giha and Russo, 2022). Currently accounting for about 5% of sales, it has room for growth by expanding its environmental reach and increasing its operations. With Greggs’s Click+Collect service, customers can pre-order online for pickup and avoid lines to ensure availability. They are testing with customized products, like make-your-own sandwiches and pizzas. In 2022, the Greggs industry grew quickly, rewarding frequent users. Digital platforms bring in more revenue and supply to new events such as dinner parties. They will remain an integral part of Gregg's expansion strategy.
Development of Menu
Gregg’s new menu aims to increase sales and foot traffic throughout the day. The longer trading hours benefit from new diner items such as chicken, wedges and hot desserts. Pizza box sharing has improved slice sales. Hot Yum Yuma is tapping into the dessert market. The choice of vegetables in a meal salad makes them appealing (Gavrilova, 2021). Testing with weighted keys and heated wraps benefits from the popularity of simplicity and do-it-yourself style. The menu plan also supports Gregg’s aim to expand availability and provide healthier options. Due to increased logistics and logistics demands due to COVID-19, pizza boxes and food options are ideal for off-campus events. Overall, Greggs’s menu innovation meets changing customer needs and advances its strategic objectives.
Expanding the Evening Trade Facility
Currently, the brand’s arrival percentage after 4 pm is just 1.2%, while its food-to-go share is 7.7% overall. Currently, 500 Gregg’s stores are open until 8 p.m. or later as a result of extended company hours. Soma items like pizza and chicken goujons are becoming increasingly popular. Most places that open later have different delivery options (Chimde, 2020). Building on its current success, Greggs intends to use focused marketing to open more than 300 stores by 9 p.m. in 2023. Greggs’s fastest-growing time of day is in the evening, providing great chances to increase sales through its digital platforms, menu and brand to meet changing consumer demand.
3.0 Recommendations
Greggs’ strategic successes and innovations offer several suggestions. First, in order for Greggs to fully appreciate the potential of these useful digital channels, Greggs needs to accelerate delivery by arranging residential and parking locations. The click + collect method is used in many stores across the country and customizes menus to accommodate more lively dinners and off-campus events, customizable, sharing options. Digital thinking should be considered when they are creating customization and sharing options. There is great potential to extend working hours, but productivity improvements must be made before this can be done nationally. Given the financial crisis, it will be important for Greggs to enhance its value messaging to repeat consumer receptions of quality and value. Finally, supply chain spending on distribution and manufacturing should be prioritized over other capital projects as they are essential to Greggs’ complex multi-channel expansion strategy in the 19th century.
The rationale behind these recommendations is to focus financially on the significant growth realized, including digital media, night and day parts, menu, pricing and extending Greggs' strong history, well-known brand and in the price proposal. Greggs can test ideas with targeted operations before going national. Supply chain investments and digital transformation must be accelerated to take advantage of changes in consumer behavior and new revenue streams.
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