On a roll: Greggs approaching 60 years in business

LAST year I was on the baked crust of a dilemma. We talk of being on the "horns of a dilemma" where either choice is unpalatable. This phrase is derived from a device in rhetoric where a person presents his opponent with two alternatives liable to skewer his own argument and was first coined by the scholar Nicholas Udall in 1548 while translating a work by Erasmus.

• Greggs has 1,450 stores across Britain and seems to be faring well despite the economic downturn

The question was: what would Erasmus or Nicholas Udall make of the subject of my then vexation? I speak, of course, of Greggs' then loyalty card.

The wondrous emporium of baked goods and culinary delights was, in those straitened times, keen to reward its regular customers with a free lunch and, like all "free lunches", it didn't come cheap.

The idea was that after nine visits to any one of the 1,450 shops across Britain, the tenth lunch was on the house. Yet there was a slight snag: in order to get a stamp on your loyalty card you first had to spend 3 or more on such tasty fodder as the "steak bake" (89p*) – an edible purse of golden baked pastry, succulent beef chunks and gravy whose subtle combination is so moreish as to turn even the most casual taster into a wild-eyed "junkie" jonesing for the next hit.

So beloved was the steak bake of Ford Kiernan and Greg Hemphill that they used it as the inspiration for the "beefy bake", whose addictive delight was the subject of an episode of Still Game.

Now, as a then regular at Greggs, (The Scotsman's Glasgow office was directly opposite) the card should have suited me, but the problem was the price. My daily lunch was tomato soup (83p) and a buttered roll (30p), and even if I indulged my passion for baked goods and opted for a sausage roll (56p) I was still nowhere close to the magic totaliser.

Say I cast my waistline to the wind and throw in the chocolate muffin (75p) – it still only came to 2.44. This was the "baked crust" of the dilemma on which I teetered. I wasn't on the horns of a dilemma, because the choices - a) stick to my regular lunch or b) buy more to claim my stamped card – did not fall into the "unpalatable" territory.

So, in effect, the question was did I topple further into the greasy heart of Greggs' empire and return each day saddled with a laden plastic bag of extraneous treats, or remain with my then current ration.

The answer was neither. Baffled, confused and slightly embittered, I went off to Aulds. Then The Scotsman's office moved and I was free from temptation, now, like the scene in Godfather Part III where Al Pacino roars: "Just when I thought I was out… They pull me back in." and keels over from a suspected heart attack (do they have steak bakes in New York?), I find myself cast back to my old stomping ground to investigate the "phenomenon of Greggs".

And it is a phenomenon. It currently has 1,450 stores across Britain, making it the No 1 fast-food outlet, ahead of McDonalds, Subway and Costa Coffee.

While many retailers have suffered an economic downturn, the pre-tax profits at Greggs, for the first six-months of this year, were up 12.3 per cent to 18.6 million and although they are expected to shrink on account of the recent rise in the cost of wheat, the company is bullishly planning to increase to 2,000 stores in the next few years.

Now, not content with the lunchtime crowd, Greggs has expanded its breakfast range to include porridge, croissants, and pains au chocolat, but the bacon and sausage breakfast rolls are the best-sellers, with seven million sold since the launch. Next year, the company celebrates the 60th anniversary of the opening of its first shop, in Gosforth High Street in Newcastle, and has come a long way since John Gregg began delivering yeast and eggs in the North-east of England.

Yet while its latest advertising slogan insists "The Home of Fresh Baking", its success has been achieved by ranging far away from the role of the traditional baker. "Greggs is an interesting proposition," said Andrew Wilson, deputy editor of British Baker magazine. "They are now set up like a fast-food outlet rather than a traditional baker.

"Their competition is McDonalds and Subway rather than a local bakers, but that's not to say they don't open near bakers, in which case one of two things happen. It goes out of business, or if the local community is supportive, it can hang in."

The company's success is that it bakes it own products, delivered fresh each day, which allows it to enjoy massive economies of scale and so keep prices low. According to Malcolm Pinkerton, a senior analyst with Verdict, a retail research company, this has been the key factor. "There are several reasons why Greggs has done so well.

They have shifted to fresh food and their prices are low. They focus heavily on lunchtime 'meal deals' (a sandwich, a packet of crisps and drink for 2.99, two million of which sold in the first six months) and getting morning trade." In straitened times Greggs, according to Pinkerton, appeals to a wide cross-section – "from professionals on a budget who might be switching down from Pret a Manger or EAT, to manual workers, older people and young families."

They have also targeted men, in contrast to the traditional bakers whose principal customer were women. Oh, how men love Greggs. Men like William Grindly, a stocky redhead, who works as a marketing consultant and has taken a lunch break in Glasgow's City Centre to indulge his culinary passion for that traditional fare: a roll and Scotch pie.

Others may feel a casing of pastry is more than enough carbohydrates for a single meal, but then there are those such as Mr Grindly who can eulogise the compression of meat, grease and soft white roll, all topped off with a splurge of tomato sauce as others would fresh sea bass in a white wine sauce. "The taste" said Mr Grindly stretching his words for emphasis "is … absolutely … amazing. A scotch pie is great, but on a roll it becomes a more substantial meal."

At 1pm the queue outside the Greggs at Central Station is round the store and out the door, blocking the pavement. Further evidence that the chain is competing with McDonalds et al is a sign declaring the store open until 4am on Thursday, Friday and Saturday. For what does a drunken clubber crave but a sweet chilli chicken and mango sandwich or perhaps a sausage roll or three?

Which brings us to the question of how healthy is Greggs? Well, when Channel 4 carried out an investigation of all high-street fast-food retailers in 2008, Greggs was the culprit with the highest levels of fat in its product launch, but since then the company has been reducing fat and salt content, and in 2009 removed added transfats and artificial colouring. Still, it's hard to argue that a sausage roll (320 Kcals, 21.5 g of fat) or a Belgian bun (30g of fat) is a health food, nor would Greggs, who instead point to the healthier options on offer. Yet Scots clearly love their saturated fats, as Karen MacKay, a 19-year-old student of chemical engineering, will attest as she clutches her ham and cheese pasty: "I normally go for the chilli steak lattice, but was drawn to the cheese today. It tastes good, a once-in-a-while treat."

The company's prime real-estate in Scotland has to be the Greggs on the corner of George Square. On Monday lunchtime a mother of three is doling out a sausage roll each to her three young children: "They don't get them all the time, but they do love them."

While the French have patisseries, so the British have Greggs. And if ever there was doubt that in Scotland those tasty parcels of meat, grease and pastry are our equivalent of chicken soup, comfort food in times of stress, it should be swept away, like a blue and white Greggs paper bag caught in a winter's wind, by the conversation overhead at a store in Hamilton.

Tempted by a three-for-two deal, an elderly gentleman dressed in black was attempting to persuade the family to plump for sausage rolls, only to be chastised by his wife with the immortal line: "The wean's just lost his mother, buy the boy a steak bake!"