Greggs, Sausage Rolls and the Ansoff Matrix

Sausage rolls and pasties are on the move…and Ansoff would be proud….

The clue is in the quote from Ken McMeikan, the CEO of Greggs,

“Making Greggs even more accessible to consumers as they travel will, I hope, be welcomed by both existing and new customers of Greggs.”

Bakery chain Greggs, which has grown strongly during the economic downturn. has unveiled plans to open stores at motorway service stations across the UK. Kipper Williams, always good for a cartoon to show in the business classroom as students arrive, has a nice take on this story…

A deal with motorway service station operator Moto will see it open its first trial store off the M6 and M56 near Lymm, Cheshire, in December 2011. A second trial outlet is planned, but the location is yet to be determined, and if the two stores are a success at least 30 stores could be in the pipeline for Moto locations across Britain.

Moto itself will operate the pilot Greggs store under a franchise agreement - a good example of franchising and test marketing all in one!

That sounds like a strategy which might have quite an impact on Greggs growth, but it has to be put into some context. Greggs already has 1,540 outlets in the UK. So even if Greggs opens outlets in 30 service stations, the overall impact on revenues will not be huge.

What is different is that Greggs will be reaching a different customer base. Most of Greggs existing six million customers (per week) are based in towns and city centres, popping out of their offices and other workplaces for lunch, or grabbing some food whilst they shop.

Now Greggs can access a different, and perhaps more captive audience - the travelling public stopping off at a Moto for a break, a wee and some nosh.

Greggs will still face pretty intense competition in its new locations. The UK service station market has undergone something of a renaissance in recent years and many high street brands have established themselves in the relatively limited number of available spaces. M&S, McDonalds and Costa Coffee have all invested heavily in this segment.

Can Greggs make a success of it too?