Lunch, for me, is usually a solitary, undignified affair involving an M&S salad, a newspaper and an episode of Bargain Hunt, but last Friday I broke with the habit, walked past my local deli, my local patisserie and the bakery with the thick staff who always need to use a calculator to work out the change, and joined the long queue trailing into the Kentish Town branch of Greggs. Why? To work out why it is doing so well.

And Greggs really is doing very, very well. As banks teeter, media companies flounder, entire nations inch towards bankruptcy, the baker, which can trace its history back to the 1930s, when John Gregg started a business delivering yeast and eggs in Tyneside, is thriving.

In the midst of recession, it recently notched up a 3.8 per cent rise in sales and serves six million customers a week, it has twice the number of outlets as Starbucks and 200 more outlets than McDonald’s, and it recently announced plans to open 600 new stores at more than double its historic rate of new shop openings — between 50 and 60 new stores next year, and 70 a year from 2011 onwards. If things continue at this rate, the company will soon have more outlets than employees.

The conventional wisdom is, of course, that Greggs’ success comes down to price: as belts are tightened amid recession, people buy more cheap comfort food, leading, ironically, to belts having to be loosened.

And price is certainly a factor: I bought a cheese and onion pasty and a smoothie for a sum that wouldn’t have bought me a slice of ham in many London delis. And Greggs’ current “meal deal” offer, which allows you to get a sandwich, Walkers crisps and bottle of water for £1.99, is preposterously cheap.

But you would be mistaken to assume that the phenomenon of Greggs is just about good value: the company also, for instance, has a profound understanding of its core customer, the average bloke. It has realised that, for all the recent trends in food for healthy eating, fresh ingredients and low salt content, blokes basically want good value grub they can buy quickly and scoff on the go.

And with this in mind they have made Greggs the perfect masculine retail experience. Some might find the blue and yellow decor tasteless, and the interiors soulless, but they are fantastically functional — the stores don’t invite you to sit around shooting the breeze in a “third space” but instead encourage you to buy your stuff and leg it. They also have the wit and wherewithal to sell proper crisps instead of posh handbaked and parsnip varieties, and there is something fantastically blokeish about the brand name “Greggs”.

At least, saying you’re off to Greggs for lunch is significantly more manly than saying you’re off to Patisserie Valerie, or even Bakers Oven, the chain that Greggs owns and is now rebranding under its own name. Another factor behind Greggs’ success: its relentless Britishness.

The company did, admittedly, have a failed flirtation with internationalism, when it rolled out several “engelse bakker” outlets in Brussels, but now it concentrates entirely on the UK. And while British cuisine has become cosmopolitan, with supermarkets flogging pasta sauces and TV chefs bringing us recipes from Asia and America, Greggs focuses on the traditional British staples of the sandwich, the pasty and the cake — and when it does experiment with international fare it does so firmly within British parameters.

Some might object to Greggs’ chicken fajita pasty, for instance, for being as nonsensical as a risotto curry or battered pizza, given that fajitas are a discrete Mexican dish of soft tortillas wrapped round fried strips of meat or vegetables and that the pasty is a discrete round pastry folded over a filling of meat or vegetables.

But herein lies the genius of Greggs: it understands that, while its customers might fancy a bit of something foreign, like people who visit Benidorm they want it only in a British package.

Which brings us to the final secret behind Greggs’ success: it is brilliant at picking locations. Not just in choosing unpretentious high street locations — and it says everything about the ponciness of where I live that I had to walk half an hour to find my nearest branch — but elsewhere, too.

For years I have sneered at the fact that Greggs runs a large concession in Wolverhampton’s New Cross Hospital, and while I still maintain the NHS Trust in question is sending mixed signals to Wulfrunians in putting the bakery next to a heart unit, according to a recent piece in the Harvard Business Review, the move may be paying Greggs dividends.

According to Andreas Eisingerich and Leslie Boehm, respectively an assistant professor of marketing at Imperial College Business School in London and director of research at the Sunnybrook Health Sciences Centre, companies that set up outlets in hospital lobbies might be helping to create an emotional bond with consumers.

In a survey of more than 3,000 visitors and outpatients at seven hospitals in Toronto, they found that seven out of ten people indicated that the presence of businesses added great value to the hospital experience — with many saying they appreciated that the companies were there for customers in a time of need. About 68 per cent of respondents also reported that a retailer’s presence in a hospital had a positive influence on whether they would purchase from the business again at another location and whether they would provide favourable word of mouth to relatives and friends.

Inspired. Or to put it another way: while Greggs may be sneered at by the middle classes, and while there are signs that it is succumbing to pretention (it recently set up a corporate social responsibility steering group and is experimenting with a “concept shop”), at the moment there is no other company in Britain that better understands its market.

sathnam@thetimes.co.uk

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