Our Greggs plc PESTLE analysis discusses the business in more depth to understand how they became such a big brand and how much the losses hurt them.
Those of you who are from the UK might know of this business. For those of you who don’t, Greggs is a very famous bakery that sells all sorts of savory and sweet items. They also have a vegan menu along with seasonal varieties. Let’s see the business in more detail in the following Greggs plc PESTLE analysis.
The business started way back in 1939 in Newcastle by John Gregg. It was eventually taken over by his brother and son when he died in 1964. They then acquired a series of bakeries all around the UK including Leeds, Kent, and Manchester. The business grew immensely and is one of the most widely recognized names in the country.
Ian Durant serves currently as the chairman and Roger Whiteside is the CEO. They had 2000 plus locations all across the UK as of 2019 but unfortunately, the business suffered a lot after the pandemic hit. They have a total of 19,000 employees as of 2020.
The PESTLE analysis will discuss the business in more depth to understand how they became such a big brand and how much the losses hurt them.
Political Factors affecting Greggs
Politics have a major role in every company’s well-being. If the political policies don’t foster an industry the business sector residing in them will suffer.
In the UK, the government is very serious about ensuring that food businesses remain ethical so as to not harm anyone health-wise.
Health critics in the UK do not let an eatery pass by if they don’t comply with safety regulations and standards.
Economic Factors
Like many businesses around the world, Greggs too got hit by Covid-19. They faced many losses over the course of this pandemic.
Although during the first few months of 2020 Greggs remained open for takeaways only in an attempt to salvage the daily sales. The payments were also made using cards; the transfer of physical cash was stopped. Unfortunately after a few days they had to close shops for a time period to avoid the spread of Covid.
Their supply chain is still not what it used to be before the virus hit us all. Their stock is often left short which drives away customers and hence profits.
They are suffering really badly in terms of sales as well. In the 36 years of being listed as a public company on the stock exchange leading up to 2019, this will be their first year of terrible loss. The forecasts say that it will be sometime in 2022 they will see profits like pre-covid days again.
They have also let go of 820 of their employees in downsizing to save some money. They have had to shut down all of their stores in 2020 as per the requirements of the government during lockdown.
That being said, the representatives at Greggs are hopeful of a full recovery as the sales they are currently making are much better than their own expectations.
In fact, they now are hopeful enough to actually anticipate the creation of 500 different jobs for people via opening 100 new stores. So it can safely be assumed that despite the huge blow of shutting down all stores during lockdown, they came back stronger than ever.
Socio-Cultural Factors
Greggs has managed to do what very few brands get to experience; they are a bakery with 2000 outlets across the UK! There are a lot of reasons for their popularity and cultural integration.
First off, they are famous for their sausage rolls which are a very popular food item in the UK. The people in the country are very crazy about meat products, especially sausages.
The introduction of a vegan sausage roll was also very well received because of the increase in the trend of veganism all across the UK. The people like its taste as well. The Vegan rolls were not only popular for the taste and concept but also for PR.
Piers Morgan spoke angrily against these rolls on Twitter to which Greggs responded in a very casual and non-offensive manner which was also very humorous. This response got them a lot of positive attention and promoted the vegan rolls without much need for formal advertising.
They have also used other creative branding strategies; upon the launch of this vegan roll, they sent PR packages to tech officials inside smartphone cases designed to look like Apple iPhone cases. Instead of a phone the box opened up to reveal the vegan roll.
They do a lot of community and charity work as well. Some of the charities they support are Greggs Foundation, BBC Children in Need, North of England Children's Cancer Research charity, The Disasters Emergency Committee and The Royal British Legion’s Poppy Appeal.
Technological Factors
Free Wi-Fi does wonders for an eating facility in terms of getting people to sit and spend time inside. All stores of the company have free Wi-Fi services.
They have also spent a lot on refurbishing many of their outlets to facilitate their business more. They now want to appear as an “on-the-go” eating service.
The company also utilises other forms of relevant technology to help foster their growth. They use a total of 16 technology products and services including HTML5, Google Analytics, and Google Fonts.
They are also using 35 different technologies to help maintain a smooth website including Viewport Meta, IPhone / Mobile Compatible, and SPF.
This information shows us that although technically a bakery store, Greggs is very dedicated to modernising themselves in order to stay relevant. This can be attributed to their success spanning over a period of decades.
Legal Factors
Although there are no specific legal ambiguities or issues regarding Greggs specifically, they are in the retail business which comes with its own sets of challenges.
Depending upon the type of business in the retail, one has to have certain licences in the UK. In the food industry, you need to register with local environmental health departments.
In addition, they have to stick to food safety regulations. The Food Safety act also lists important points to be complied with.
Covid has also posed many threats to the retail sector amongst other sectors. The UK government however has been very supportive for business owners; if an owner is unable to pay any due payments, they will not be evicted. This policy lasted till June 2020.
Environmental Factors
Greggs is doing a lot of commendable work to give back to society. It was the founder’s vision to always play his part in helping the environment.
They have hired a group of people known as the “Net Zero Taskforce” so they can have experts guiding them on how and what to do for a sustainable future.
They are currently developing an eco-friendly shop design so as to change the current outlay of their shops across the UK.
This design features technologies and infrastructure that are greener in comparison to what already exists. They anticipate rolling out the design by 2025. In 2019, they reduced their use of single-use plastics by 350 tonnes! They want to completely get rid of it by 2025 also.
They have also collaborated with Refill UK to allow eco-conscious consumers to refill their own bottled waters with drinks instead of using store cups or straws. They are making many energy and water conservation efforts.
Their bakeries have photovoltaic panels on the rooftops to produce electricity. They prefer to use only LED bulbs in all of their stores. They donate unutilized food via a program they started called Food Donation Programme.
They are effectively making efforts against reducing their carbon footprint. They have an environmental management system that helps them monitor all of these efforts in an efficient way.
This system is accredited to ISO 140001:2015 which proves their efforts are worthwhile and justified.
Greggs PLC PESTLE Analysis: Final Thoughts
Now that you have completed reading this article, you surely know about what Greggs PLC is and what they stand for. UK nationals might already know a lot but for many of you this might be new information.
When you hear that it is a bakery being discussed in so much detail, you are bound to think that “this can’t be interesting”. But you have to hand it over to Greggs for making a bakery into so much more. Not only are they one of the best in their line of work, they have created a business that survived so many decades.
Despite being severely impacted by Covid, so much so that they had to temporarily cease operations, they have managed to turn things around remarkably well. This analysis did not identify anything troubling about them. It is safe to assume it is an excellent business.
Very rarely is this conclusion derived, where almost no faults are found in the PESTLE analysis of a business spread over a country. Much like we uncovered in our Greggs SWOT analysis recently. Good job Greggs!
In order to fully understand a company in-depth, it is important to know about the external macro-economic factors along with the internal factors of a company.
These external factors have a very big impact on any company’s overall performance. A PEST Analysis is a tool that achieves exactly this; a detailed overview of a company’s performance in light of external macro-economic factors.
An acronym for Political, Economic, Socio-cultural, Technological, Legal and Environmental factors, PESTLE analysis helps in understanding as well as forecasting how a company will perform in the future.
If you want to learn how to do a PESTLE analysis yourself, you can visit our website where we explain the process in exquisite detail. In fact, you can also look at the PESTLE Analysis template if you want to get right to work on one.
