Let me say up front: I’m not a fan of a pasty. You can keep your flaky pastry. But I do like a Greggs hot baguette, or a coffee, or a cake or two.

Greggs is based here in Newcastle, and I walk past the original Gosforth High Street shop most days. One of the interesting aspects about living in Greggsland has been watching their gradual transformation from a bakery to a takeaway-cum-coffee-shop.

Greggs has long had a handful of ‘Greggs Café’ branches: a large seating area with a pretty standard Greggs counter. These exist mostly, or perhaps even exclusively, in big shopping centres.

If I remember rightly, their first recent major push into a coffee shop model was the launch of ‘Greggs Moment’. This was a short-lived North East chain of coffee shops similar to a high street Costa or Caffé Nero, which also carried a range of Greggs food. These didn’t work. I don’t have any great insight into why, but I suspect the business model was flawed in that the sales volume wasn’t high enough to make a decent profit at the Greggs pricing level. Coffee shop customers tend to hang around.

The next push was into a chain of Greggs branches that were given a bit of an upmarket makeover and had seating installed, branded as ‘Greggs Bakery’. These seemed to work pretty well, combining the high-throughput of the bakery counter with the option for people to buy and eat hot stuff on the premises. A version of this—more extensive hot food plus some seats, minus the upmarket makeover—has now been rolled out to a large proportion of Greggs shops.

‘tasty by Greggs’ seems to be a new approach to creating a coffee shop style business. They are located within Primark stores, and I popped down to the third branch, which has just opened in Newcastle. This branch replaced and extended a former Costa concession within Primark, and the clothing shop has placed a range of Greggs-branded apparel for sale right by the café.

The branch I saw—which I’m assuming was representative—was filled with ‘Instagrammable’ features, like the large neon bridge pictured above, a themed phone box, a branded swing, and seating booths designed to look like giant doughnuts. Beyond the decor, though, they seem to be a standard Greggs outlet with much more seating (114 seats at the Newcastle one). They heavily advertise that ‘take out’ is available, but I can’t imagine this being a roaring trade: nobody is going to trek up to the second floor of a Primark for a Greggs takeaway when the shop is within spitting distance of three ordinary ground-level Greggs branches.

It was very busy, and I didn’t stick around for food or drink, though was disappointed to note that they use disposable coffee cups, even for those dining in. Emmanuel Macron would not approve, though it may be the least of his worries.

Logically, this would seem destined for the same outcome as Greggs Moment given the lack of passing traffic… except for the fact that I don’t think these branches are designed for cash generation. They seem like they are actually there as brand-building tools, generating positive associations with the brand and building cachet through people sharing social media posts.

This seems to play into the Greggs strategy at the moment, which seems to be all about building the brand. It seems to be working for them… but it does feel a bit time-limited to me. Fashions change, and it’s hard to see a bakery riding that wave for long.

But what do I know? I’m only in it for the okay coffee and the alright southern fried chicken baguette.

There are few things that are further from my area of expertise than coffee retailing, but here’s a thought that occurred to me last week, and that’s been festering ever since.

All the major coffee shop chains and many local coffee shops have loyalty schemes these days. These are often of a particular type: buy X coffees and received the Yth coffee free. The generosity of such schemes varies widely: X=5 at McDonald’s, X=9 at Caffe Nero, and X=15 at Starbucks. Some chains do something slightly different – Costa, for example, gives points equivalent to 5% of the customer’s spend to be redeemed on future purchases, but let’s set those alternative schemes to one side.

The thing that links all of the common schemes is they are effectively fixed ratio reinforcement schedules. That is, they entice customers to buy more coffee by promising a freebie every X visits. But a wealth of literature from psychology reveals that this isn’t really very effective in getting people to form habits, not least because their motivation to consume drops off immediately after claiming free coffee Y.

A far more effective method of getting people to form habits is to build a variable ratio reinforcement schedule. As with gambling, this means that the punter / customer never knows when the win / free product is going to materialise. This keeps motivation consistently high.

In practice, what I’m suggesting is that the ratio of visits to free coffees is kept the same (X+1:1), but that the free coffees are dispensed at random. This would appeal to me: I’d love to come to pay for a coffee and be unexpectedly told that this one’s free. An infrastructure change would be necessary for some coffee shops – stamp cards wouldn’t really work well for this – but, for example, Starbucks already uses swipe cards which could be made to work this way fairly easily.

Alternatively, instead of randomising at the individual customer level, the tills could be set to randomise across all customers. Or, to make it even simpler, with every coffee purchased, each customer could be given a scratchcard with a 1 in X+1 chance of winning a free coffee. The latter might even be preferable, as there would then be two “special” visits: the one in which the customer wins, and the one in which they redeem their winning scratchcard. The customer would feel rewarded for their loyalty twice as often at no extra cost to the vendor.

If judging on cost alone, why would I visit retailer A, where there is no chance of getting my drink for free on a particular visit, when I could visit retailer B, where there is a 1 in X+1 chance? Economic discounting would probably play against traditional schemes: I’d probably rather have the chance of a free coffee today than the certainty of a free coffee after X visits.

Of course, retailers would have to be careful about how they presented this scheme: it would likely be to the detriment of any brand to associate themselves with gambling. Yet this seems like it should be a minor point, which should be easily overcome.

So here’s the thing: this idea appeals to me as a consumer, a wealth of literature suggests that it could increase trade, yet (to my knowledge) no-one uses it. Why not? Where’s the rub? What have I overlooked in my assessment? Tell me why I’m wrong!

A little over twelve months ago, I was asked on a discussion forum to make predictions about the retail sector in 2012. I’d forgotten all about this until today, when somebody pointed out my prescience!

On 30th December 2011, I posted the following (forgive the reformatting!):

M&S is going to have a bad year: They seem to be doing everything humanly possible to disassemble the formula that brought them back from the brink a few years ago. On the other hand, WHSmith’s profits are up, even if their sales are down – I reckon they can ride out the storm for a while. My predictions for chains that will collapse are JJB (frankly surprised they’re still around); Past Times (feels like it’s had its day, so to speak); and Mothercare / ELC (already pulling out of town centres, doesn’t bode well).

And, indeed, M&S had a bad year, WHSmith did reasonably well, Past Times closed, JJB closed, and Mothercare is on the brink.

You might think I’d feel proud of my amazing predictive abilities, but in fact, I feel mainly freaked out – especially since my history with predictions isn’t great. It’s also weird to think that I correctly predicted thousands of job losses – it gives me a creepy sort of guilt, as though I’m somehow responsible.

So given the discomfort I’ve inadvertently caused myself, the only prediction I’ll make for this year is that the economy will fully recover with no more companies folding, and unemployment will hit record low levels. Though if that turns out to be true as well, I might displace Mr Soult as the media’s favourite north east retail analyst!

Here’s me with Crimbo, the smallest of the Metrocentre’s oversized reindeer! It’s almost twelfth night, so I guess they’ll have to be dismantled soon!

I surely can’t be the only person who finds it irritating when supermarkets decide to turn themselves into obstacle courses by bringing out every roll cage, pallet and cleaning trolley from their warehouse and abandoning them in the aisles…! It’s especially annoying when they line pallets along one side of an aisle, blocking access to all of the shelves on that side.

In an apparently litigious culture, it’s a wonder these retailers aren’t sued every five minutes by shoppers tripping over the unattended cardboard boxes that are frequently found littering the aisles.

I attempted a 6.30am trip to M&S for Christmas food this morning, reasoning that I might avoid the crowds. Unfortunately, it seems the crowds had the same idea…! I can’t believe how busy it was at that time in the morning! I’m now recovering in the cafe.

Since I’m a photo behind and need to make up the numbers, and since I’m on a roll of Christmas-retail themed moans…

How insulting is this Argos campaign?! In the spirit of equality, I look forward to next year’s “Keep Calm Women” follow-up. I assume it will perpetuate a ditzy, dim, over-excitable, self-obsessed stereotype of women that’s as insulting as the lazy, dunderheaded, disorganised, misogynist stereotype of men perpetuated this year by retailers like Argos and Asda.

But I like to think that they will see sense and reflect the reality of 21st century life in the UK. After all, isn’t this the season of hope?

It seems that WHSmith have started their Easter campaign. Depressing, isn’t it? And I would (perhaps naively) have thought that reminding consumers of another retail-driven spending spree around the corner would depress Christmas spending.

But with a mere 106 days left for customers to get their hands on some themed chocolate, who can blame them for trying?

I’ve complained about Tesco piling up alcohol at the entrance before, as it really doesn’t strike me as responsible marketing. But today, the display was the biggest I’ve seen. I struggled to take a photo – as you can see – that captured the amount of alcohol there was on offer.

It’s interesting that Asda agreed in 2011 to stop this kind of thing, and Morrisons has started putting fruit and veg offers at the front of their stores, yet Tesco still persists with an attitude of pile-them-remarkably-high and sell-them-remarkably-cheap when it comes to alcohol.

Spotted in Sunderland earlier today whilst completely lost! I always get lost when I go to Sunderland city centre… it’s as if they’ve not yet discovered directional signage for pedestrians!