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Greggs to launch mobile loyalty scheme

Greggs the baker is set to launch a new mobile wallet-based loyalty scheme this autumn – the first loyalty programme the company has ever had.

Commenting on Tuesday during a conference call for the snack retailer's half-year results, CEO Roger Whiteside said that the business has "leapt over yesterday's technology" and opted for the mobile contactless approach to loyalty, which he views as a real growth area in retail payments.

In 2011 Greggs placed card machines in all of its stores and last year it introduced contactless payment terminals across its property portfolio. The loyalty scheme is the next part in the company's electronic point of sale evolution, although Whiteside did not reveal which technology solutions operator Greggs is working alongside.

"It's in active use in trial shops with members of staff – we're ironing out the glitches that you get in systems work of this type," the CEO explained.

"We have contactless in all shops and it is a quicker way to pay. Take-up is still relatively slow – customers are reluctant to use it, but awareness around the technology is growing. We're keen to process people through the till as quickly as possible, and believe this method helps."

Greggs announced that like-for-like sales for the six months to 29 June 2013 were down 2.9% compared to the same period last year, while pre-tax profit dropped £4.6 million to £11.4 million. Adverse weather conditions earlier this year and increased competition in the food-on-the-go market from the large grocers have had an impact on the retailer's top and bottom line.

The company is planning to focus its attention on transforming its current outlets rather than expand its portfolio, with between 230 and 250 shop-fits expected to be completed by the end of 2013. Greggs also announced a major investment of £25 million in processes and systems to "build a platform to deliver long-term sustainable growth".

Practical examples of planned development that were announced in the half-year report, include the introduction of an integrated ERP-based stock system to replace the legacy of an autonomous divisional manufacturing & warehousing structure. Additionally, new ordering processes are to be added "to ensure better product availability and reduced waste".

Greggs is also set to develop a forecast-based manpower planning application to replace manually-generated staff rotas.

The £25 million investment over five years is expected to bring £38 million in direct benefits and "improved responsiveness and flexibility for future developments".

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