8/14/2019 BB Greggs Interview

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New s in s ig h t I Top 50Greg g s p ow erh o useCan the man at the helm of Britain'sleading bakery retailer give it theTesco effect', with consumer-focusedpolicy and ambitious expansion plans?Anne Bruce finds out more

Tesco opened its first TescoExpress outlet in October2002 and nowhas 880.Notbad for six years' work.The relevance to Greggs?Well, Greggs has a new man incharge, Ken McMeikan. Hespent 14 years at Tesco and wasa key figure in the glory days ofthe roll-out of its Tesco Expressformat in 2004, leaving after-wards for Sainsbury's. That'swhy McMeikan should be takenseriously when he promises an"escalation in growth" atGreggs,already the UK's biggest takea-waychainwith1,403shops-manymore than McDonald's orStarbucks. "We are a growthbusiness and we need to set upin a way that we can acceleratethis growth," McMeikan insists.McMeikan is in the ideal posi-tion to do that; his prudentpredecessors squirrelled mil-lions away in company coffersand the business has zero debt.Growth opportunitySo what is the scale of his ambi-tion? The old Greggs wouldreliably open around 50 newshops a year, towards a longer-term goal of 1,700 by 2010.McMeikan takes a bolderapproach. He comments: "I haveseen a significant opportunity forgrowth in the UK We serve onemillioncustomers aday,there areover60mpeople in the UKThereare parts of the country that donot have a Greggs or a Bakers'Oven shop and towns and citieswhere we are under-represented.Customers loveour products, butwe need more locations."Adding shop numbers is notdifficult, he says. In fact, the eco-nomic downturn willmake it easy.

"I believe there is going to be anwww.bakeryawards .co.uk

"Wewan t th eright shops in theright lo ca tions -n ot sh op s th atcannibaliseex is ting trade"- Ken McMeikan, MDover-supplyofbakery units avail-able on the high street in thefuture and thatthe rentals marketwillsoften.Idon't wantto set arti-ficialtargets," he says, explainingthat location is what matters."People can be driven to acquireshops for numbers' sake. Wewant the right shops in the rightlocations - not shops that canni-balise existingtrade.Andwewantthe best deals on leases; we don'twant to lock into IQ-year dealswith five-yearbreak clauses."Greggs is also planning to lookat the Irish market for the firsttime as it expands, althoughthere is "no immediate rush", hereveals. 'There is significantgrowth opportunity in England,Scotland andWales, but at somepoint in the year, we will go tomeet with people onthe groundin Ireland and understand theproperty market and which partsof the country are appropriate."

For now, it's all about sortingout "operational challenges".Evenabusiness like Greggs hasroom for improvement.CompetitionAs British Baker's 2009 Top 50list shows, Greggs' top spot onthe list is under threat, as the1,284-shop chain Subway plansto overtake it on store numbersby the middle of this year.Moreover, Greggs' businessstructure, with 10 separate divi-sions, causes complications. Atthe moment, only 30%ofGreggs'range is the same nationwide,McMeikan wants that to be 80%,with 20%of the range still beingregional. "Wewant to simplifyitand make it consistent," he says.Greggs is also convertingBakers' Oven shops to the domi-nant Greggs brand and closingits10loss-makingshops inBelgium,to focus on leadership in the UK

In addition, it will look at theway it serves customers,McMeikan adds. "Our loyal cus-tomers know we make sand-wiches fresh every day, andknow if the product is not there,they can ask one of our staff tomake it.Weneed to get that mes-sage across to everyone."The tea and coffee offer is alsobeing investigated."Wewilloffergreat-tasting coffee, but cheaperthan the competition- not 2,say1.20,"he says. "Iamable tobringa lot from my background insupermarkets and conveniencestores. I understand howaworld-class centralised business likeTesco operates, listens and reactsto customers in a waythat is con-sistent across the whole estate,"he says.Sounds like McMeikan plansto keep Greggs top of thebakery retail tree for some timeto come. []J

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