UK's biggest fast-food chain you've never heard of
UK's hidden bakery giant: bigger than McDonald's and Starbucks combined.
This bakery chain has more stores in the UK than McDonald’s or Starbucks… COMBINED.
UK's unknown fast-food leader
Today, we are introducing a company few people have heard of.
Let me tell you a story about Warren Buffett.
During the 2009 financial crisis, Warren Buffett drove through Omaha with a CEO friend. The streets were empty, the shops were closed, and there was little hope for improvement.
"How are we ever going to get out of this, Warren?" the friend asked. “This country is never going to be same”
Buffett paused, then asked a question.
“Do you know what the best-selling candy bar was in 1962?”
When the friend said he wasn’t sure, Buffett told him it was Snickers. He then informed him of the best-selling candy bar of 2024. Still Snickers.
Why it’s important? Some things don’t change.
McDonald’s is a good example. It is difficult to imagine McDonald's not being the most popular fast food restaurant in the US. The brand is iconic, and the menu is perfect for American culture.
Which fast food restaurant was the most popular in 1962? McDonald’s.
What is the most popular fast food restaurant today? McDonald’s.
What will be the most popular fast food restaurant in 2050? Probably McDonald’s.
But what if I told you that in the UK there is a fast food chain that is much more popular than all of them put together? Enter Greggs. A fast food bakery chain that sells pies, sweets, and sausage rolls.
What makes Greggs so popular?
Like McDonald's menu in the US, Greggs menu is perfect for the way people in Britain eat. Additionally, Greggs is by far the cheapest. Their most popular item, the sausage roll, is only £1.45. Not surprisingly, the average deal value is only £2.70.
Why it’s important? Greggs is better protected against inflation and crises than its competitors because it is the cheapest. Whatever the economy is like, Greggs will always be the cheap option. In terms of inflation, Greggs will raise prices less than their competitors if both of them raise prices by 10%. For even more protection against inflation, Greggs has one of the highest gross margins in the business (61%).
When it comes to moats, Greggs has two: they have the best brand and the lowest prices. Good luck going up against that.
Greggs is growing by 15% every year, has a 20% return on investment, and doesn't have any debt. Despite risks such as slowing store openings, Greggs is valued at a P/E ratio of just 20. In our opinion, this is not expensive.
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We wish you the best on your investment journey.
@investmenttalk has covered Gregg well , might be worth your time to check him and the articles out