Takeaways from Gregg's growth strategy for startups - beyond the sausage rolls

Pizza Hut was once a go-to budget restaurant to tuck into its all-you-can eat buffet, unlimited salad bar, and lashings of self-serve ice-cream, but the changing market dynamics for eating out and the pizza market has seen fewer diners ‘hitting the Hut’ and it is closing half its UK restaurants after going into administration for the second time this year.

Pizza Hut's all-you-can-eat model has become expensive. Depending on your order, Pizza Hut and Domino's prices are similar. While Pizza Hut offers takeaway and deliveries through Ubers Eats, Deliveroo and Just Eat, it is losing out to rivals which solely cater to this market. More of us are now eating at home than eating out, recent statistics that show a 6% drop in people going to casual and fast-food restaurants over the summer.

There is also another rival to restaurant and takeaway pizzas: the cook-at-home oven pizza, with many purchasing home-pizza ovens. People have looked for a more a premium experience and Pizza Hut's American-diner style feels retro and tired. The emergence of high-quality authentic pizzerias has fundamentally changed the public's perception of what good pizza is.

Pizza Hut struggled because it failed to keep up with changing customer demands and didn’t offer anything new. It needs to reinvent itself and adjust its cost model. Their traditional market has evolved and been sliced up and distributed to trendier, more nimble rivals.

A good example of being agile and alert in a traditional market is Greggs, whose brand has a similar ‘retro’ feel, but have repeatedly refreshed their offering and customer experience in response to changing market dynamics. Their strategy offers good insight into pushing an imaginative, innovative strategy, taking risks with constant reinvention, being bold, brave and alert – all good lessons for startup strategy.

John Gregg founded his bakery in 1939, selling eggs and yeast from his bicycle in Newcastle. The business grew, to selling pies from his van to miners' wives. They opened their first shop in Gosforth in 1951. When John died in 1964, the business was taken over by son Ian and major expansion began, including the acquisitions of other bakeries such as the Bakers Oven chain from Allied Bakeries in 1994.

Greggs grew to be the largest bakery chain in the UK, home of the bacon sandwich and a coffee for two quid special offer which, disappointingly, is now £3.15, famous for pies, pasties and sausage rolls. A couple of years ago, Greggs fell victim to adverse PR about its product range and customer base. Oh how the Prêt crowd sniggered into their avocado and crayfish salads.

Yet Greggs just got its head down and kept growing. ‘It’s a northern thing’ no longer serves as an explanation. Today Greggs generate £1m a week from sales of coffee, having repositioned the brand from a bakery-to-take-home to a high growth food-on-the-go entity, meeting changing customer demands and evolving food culture. The latest financial results to 27 September 2025 are impressive and reflect a bold growth strategy – including a ‘Bake at Home’ range now in 930 Iceland and 820 Tesco stores and online.

In 2016, Greggs weren’t in the takeaway breakfast market but now only McDonalds sells more takeaway breakfasts. With a Fairtrade Expresso, it has overtaken Starbucks to become the third-largest takeaway coffee seller, behind Costa and McDonalds, while only Tesco sells more sandwiches. So what are the lessons from the success of Greggs changing its business strategy and model that we can take into our startup thinking?

Be agile in how you connect with customers. Greggs expects to pass 2,000 outlets this year, 65% are on high streets, with the remaining 35% located in retail and office parks and in travel locations such as railway stations and petrol forecourts. The aim is to change the emphasis of the business so that it is 60% non-high street outlets.

Part of this is having many of its stores open earlier and close later, in order to target those going to and coming back from work, expanding its menu to suit. As well as its drive-through locations, the company has a click-and-collect service, as well home and office delivery by Just Eat and Deliveroo. They aim to integrate click-and-collect and delivery services with the company’s Greggs Rewards app offering a range of customer touchpoints and customer engagement options.

Takeaway: Greggs route to market strategy is to based on expanding their reach to enhance customer convenience, a ‘fish where they swim’ strategy, reducing the barriers between themselves and their customers, uplifting the customer experience and making the ability to connect and purchase convenient.

Build your brand to face your market. Greggs has in recent years persistently bucked the wider trend on UK high streets, where most retailers are struggling to compete as sales shift online and the cost of running stores rises. Greggs began to transition out of the bakery market with the reasoning that it couldn't compete with supermarkets, switching to focusing on the ‘food on the go’ market after discovering that 80% of its business was in that market.

Greggs worked hard at getting consumers to think about it as a food-on-the-go chain, developing online ordering for collection and home delivery as key pillars of their strategy. They are more in touch with where the customers are today. It has managed to cater to new markets without being overly ambitious. The builder can still come off the building site and get a hot pasty, but there are also salads and healthier options. The decor is recognisable even if it has been upgraded and the older traditional customers still feel comfortable.

Takeaway: Many businesses want profit as their objective. But if you only focus on short-term wins and results, you get distracted from doing the work required to grow and scale, and it's the ability to scale that matters. The process is more important than the outcome at early stages of a change of strategy. Focus on getting good before you worry about getting big.

Look forwards, not backwards with your product offering. Greggs sells 1.5m sausage rolls a week but created their vegan option due to public demand after an online petition signed by 20,000 people. In recent years Greggs has been innovating within its product range to appeal to a broader range of customers. Its ‘Balanced Choice’ healthy eating range includes wraps and salads, all below 400 calories. It also sells gluten-free and several vegan lines.

The company has taken advantage of rising demand for food ‘customisation’, driven by allergies and ‘food avoidance’ preferences, and its stores now make sandwiches on request. One in eight customers buy vegan sausage rolls, which has overtaken doughnuts and other pastries to become a bestseller. The traditional sausage rolls remain at number one – with its 96 layers of light, crisp puff pastry - but there are more vegan products in development, including a vegan doughnut. It’s worked, such that Ginsters released their own vegan product for the first time in its 52-year history.

Takeaway: Greggs has been bold in its response to the adverse publicity on its offering and changing food culture.  Aligning your product strategy with a focused brand image and route to market is core to any business model.

Be clear about your marketing message and tone of voice. Before the vegan sausage rolls went on sale, TV presenter Piers Morgan sent out a tweet: Nobody was waiting for a vegan bloody sausage, you PC-ravaged clowns. The tone of the company’s response: Oh hello Piers, we’ve been expecting you - friendly but with a slight edge, was attuned to the ironic, self-confident marketing Greggs has adopted, a James Bond-inspired, droll putdown that was the perfect riposte.

Their hilariously portentous launch video - part of a build-up that parodied the release of a new iPhone model with journalists sent vegan rolls in mock iPhone packaging and stores sold sausage roll phone cases - meant that for days Twitter was engulfed with people talking about a £1 bakery product.

The vegan sausage roll campaign, launched to support the Veganuary campaign that encouraged people to give up animal products for a month, followed other memorable promotions include a Valentine’s Day campaign offering ‘romantic’ £15 candlelit dinners in Greggs shops, and a spoof ‘Gregory and Gregory’ event, and one faux pas: a 2017 advent calendar tableau of a sausage roll in a manger. After complaints Greggs apologised and reprinted with a different scene featuring Christmas muffins.

Takeaway: Greggs found its distinctive marketing style when it saw off then-chancellor George Osborne’s proposed ‘pasty tax’ on hot takeaway food. Since then it has been consistent in its purposeful, structured and memorable content driven communication strategy, making the brand relevant to its target audience and differentiating its offering in an increasingly competitive market to reposition the brand.

Don’t let your business model become stale. Innovation can be about efficiency. Look at Ikea, and The Billy bookcase. It’s a bare-bones, functional bookshelf if that is all you want from it. The Billy isn't innovative. The Billy innovations are about working within the limits of production and logistics, finding ways to shave the cost, while producing something that does the job. It demonstrates that innovation is not just about snazzy new technologies, but also boringly efficient systems.

Takeaway: innovation in Greggs is about efficiency, economy and effectiveness, searching for ways to make their products even better and affordable for their target market. A ‘back to basics’ focus on the business model reflects the culture and humility of the brand. Combined with brave decision making to implement change and execution in a consistent, simple and continuous manner has delivered the results.

Ensure your folks keep clear heads. Amidst the hullaballoo and the frantic activity in the coming and going of customers at peak times, staff have to keep a clear head in the heat of the moment. Resilience in times of peak demand is needed to keep the customer experience as fresh and stimulating as the steak bakes. When you go to a Greggs, the staff are so engaged in what they do its untrue, they are like whirling octopus serving customers, and they do it with good humour, bantering with regulars, enjoying the success of seeing returning customers, before going again.

Takeaway: Greggs are focused on a simple, core value proposition – basic, quality food at reasonable prices, consistently produced - but the fundamental premise is to make customer experience the brand differentiator and staff-customer interaction is key to this.

Many takeout food companies are head-on competition to Greggs. Changing lifestyles, evolving eating habits and increasing health awareness are affecting growth of organisations in this industry. Greggs has set its strategy from a customer’s point of view and with customer-based insights, to ensure the business model is as robust as it can be.

However, there are economic challenges facing Greggs. Earlier this year they increased the price of its sausage rolls by 5p to £1.30, citing wage, tax and food cost rises. The move formed part of an average 4% price rise on key items including coffee and doughnuts. They increased the price of breakfast deals by 20p in October after sales slowed as the July heatwave led to consumers shunning hot pastries.

Greggs can no longer rely on sales volumes to absorb cost inflation and may have to lean on price increases across popular categories to protect margins. This strategy may work in the short term, but it carries risks if price sensitivity among its customers intensifies with consumer confidence fragile and continuing cost of living concerns.

 The learnings from Greggs for startups are clear:

• put your target customer at the centre of your business model

• ensure your offering evolves to stay relevant

• pay attention to customer experience

• avoid complacency, never standstill

• be bold and brave in your strategic thinking