Forget the Egg McMuffin. Brits are going crazy for the bacon and sausage buns offered by Greggs, an 85-year-old chain of budget bakeries that just posted its best-ever performance.
The company said Tuesday that it had taken 19.6% of the food-to-go breakfast market in the United Kingdom last year — knocking McDonald’s (MCD) off the top spot — and snagged 8.2% of the overall market for takeaway food. That share is at an all-time high and up from 7.7% in 2022.
Pre-tax profit also jumped more than 13% last year to a record high of nearly £168 million ($213 million).
Greggs is expanding quickly: it had nearly 2,500 stores across the UK at the end of 2023 — significantly more than the 1,450 stores McDonald’s has in the UK and its neighbor Ireland — and plans to open as many as 160 this year.
McDonald’s UK did not immediately respond to a request for comment.
Greggs started out as a family-run business delivering bread and other baked goods to mining communities in Newcastle, a city in the northeast of England, drawing cost-conscious consumers to its stores ever since.
But following a string of partnerships with supermarkets, food delivery apps and even a major clothing retailer — and a cost-of-living crisis that forced many Brits to tighten their belts — the chain’s popularity has skyrocketed. Its stock has risen 57% in the past five years.
Greggs’ breakfast meal deal — which includes a sausage, bacon or omelette-filled bun and a drink — starts at £2.85 ($3.62), and is particularly popular with customers, a company spokesperson told CNN.
The company’s ambition, set out in 2021, to double sales by 2026 is “very much on track,” chief executive Roisin Currie said in a statement Tuesday. Sales grew to a record £1.8 billion ($2.3 billion) last year, up from £1.2 billion ($1.5 billion) in 2021.
“Greggs is far more than just a treat, and its value offering puts it in a sweet spot with consumers still battling higher living costs,” Matt Britzman, equity analyst at Hargreaves Lansdown, wrote in a note Tuesday. “Maintaining that price point is key, and, with cost inflation easing, Greggs is making sure customers feel the benefit too.”
‘Nostalgic’
The company’s recipe for success has included humorous, attention-grabbing collaborations designed to broaden its customer base.
In 2022, Greggs rolled out its first ever line of clothing with Primark, selling everything from bucket hats to t-shirts and leggings — dubbed “greggings” — emblazoned with its familiar blue-and-yellow logo.
In December, Greggs launched a pop-up restaurant in Fenwick, an up-market department store in Newcastle, where it served its popular sausage rolls and Steak Bakes under silver cloches, as well as its own spin on eggs benedict — Greggs Benedict.
Still, the chain’s main appeal is its no-frills convenience, says Alex Morton, a recruiter from London, who told CNN she had been visiting its stores on her lunch breaks since high school.
“Greggs is a national institution… and makes me feel nostalgic,” she said. “These days, the main appeal is how quick and convenient it is. If I’m on the go, I grab a Sausage, Bean and Cheese Melt.”
