Sausage rolls will be on the menu at Gatwick Airport this summer as the value-for-money baked goods retailer Greggs make its debut at London Gatwick Airport—but only for arriving passengers and those in the land-side of the South Terminal.
The move is the first into an airport in the south of England and marks Gregg’s seventh airport opening and the first at a London gateway, which is also Britain’s second busiest. Gregg’s property director Tony Rowson told me: “We are expanding and diversifying our retail estate as part of our property strategy where we are active within rail, underground and air sectors.”
That strategy is on a slow burn, at least when it comes to airports. Greggs opened its first airport-format shop in Newcastle, its home town, in the north of England in 2004. Almost two decades later it will have just seven at airports: in Manchester, Leeds, East Midlands, Liverpool, Birmingham, and soon, London Gatwick.
Though the airport shops have been well received by travelers looking for value, the Greggs concept may be at odds with many airport retail strategies which—even with food and beverage—often favor higher-end offers with high margins, or those that have strong international branding, for example McDonald’s or Burger King.
An inherently British brand
Greggs, with more than 80 years heritage, is inherently British, selling millions of sausage rolls, steak bakes and, more recently vegan ‘sausage’ rolls at reasonable prices through more than 2,300 shops across the U.K. The company also saw an adventurous second fashion tie-up with another value retailer Primark last year.
The Greggs operation is versatile enough to operate across many different formats including the small footprints demanded by airports. However, airport retail managers also think carefully about the passenger perceptions of their retail and F&B offers, which is where Greggs may come unstuck with its core value proposition and mass market appeal.
Former British prime minister Boris Johnson is not averse to a Greggs sausage roll or two. (Photo by … [+]
Nevertheless, the franchise retailer—which also sells donuts and healthier salads and sandwiches, will persist with the travel channel. Rowson said: “We are continuing to focus our efforts on new on-the-go locations where people work, shop and travel.”
London Gatwick Airport—which serves mainly leisure passengers on short- and long-haul point-to-point services—is taking a risk by replacing a Costa Coffee, directly opposite the arrivals gates, with Greggs. It will be the first new food and beverage outlet to open at the gateway in 2023. Pam McCarthy, director of retail at Gatwick Airport said: “Greggs will provide a warm ‘welcome home’.”
The implication is that Greggs will appeal to existing Brits who know the name and the offer. But it should do more than that. For non-U.K. travelers unfamiliar with the brand, the Gregg’s outlet can create a real ‘sense of place’, something airports all strive for—with very mixed results. For the retailer, this will be the most international airport location it has opened so far and is therefore a perfect opportunity to test its offer with a new audience.
Supply chain control
With ownership of its supply chain, Greggs says it can make freshly-prepared food accessible to everyone. The company shifted from bakery lines to include food-on-the-go in 2013, and is now expanding its estate with a shop opening pipeline that is targeting “at least 3,000” units in the coming years.
In the 12 months to December 2022 Greggs total sales were up 23% year-over-year to £1,513 million ($1,873 million) with fourth quarter growth at 18%.
In a statement alongside the results earlier this month, CEO Roisin Currie, said that market conditions in 2023 would be challenging but that Greggs’ value-for-money offer would be “highly relevant as consumers look to manage their budgets.” That may well apply to airport passengers too.