Cornish Bakery

Source: Cornish Bakery

Cornish Bakery shop in Rye, East Sussex

Cornish Bakery has confirmed it will open at least 10 new sites this year, as it looks to continue its double-digit growth in turnover.

In its full accounts for the 53 weeks to 1 June 2023 posted recently to Companies House, the independent bakery chain reported sales of £23.6m, an 13% increase from the £20.9m taken the previous year.

Gross profit margin of 71.7% was slightly less than both of the two years prior, while EBITDA had fallen down to £3.2m from £4.2m in FY2022.

However, the report noted that the figures from 2022 and 2021 had been inflated as a result of the benefit derived from the COVID-related temporary reduction in VAT and business rates relief.

Ending the latest financial period with an estate of 56 shops, including six under a franchise agreement with Roadchef Motorways, Cornish Bakery has since surpassed the 60-mark.

Cornish Bakery founder and owner Steve Grocutt  1440x1800

Source: Cornish Bakery

Founder and owner Steve Grocutt

Founder and owner Steve Grocutt estimates earnings from these new sites will push EBITDA towards £5m, with more to come. “We have a pipeline of ten, possibly 11, all set to open by the summer of 2024,” he commented – Lewes in East Sussex will become the first of these when it launches next month.

Having first started out serving tourist locations, Grocutt revealed a decision several years ago to target high streets had proven to be a successful strategy. “All of the new site openings planned for this year will be regular high street locations within small to medium-sized towns and cities across the UK,” he said, adding “There are significant opportunities across the country and we’re going for it.”

While keen to avoid getting “hung up on numbers”, Grocutt admitted the company was constantly looking to add to its shop estate, which could reach “100 easily, perhaps 150 to 200”. The ambition to double or triple its stores had previously been announced along with the hunt for a new managing director, intended to ‘lead the brand to the next level’.

Cornish Bakery had already made the appointment of Raj Manek last year as its first head of acquisitions helped support its expansion. “Raj has created a target list, but there is no pressure,” noted Grocutt. “He took Loungers from 30 sites when he joined to about 160.”

The business appears in no hurry to secure a new MD, with Grocutt saying he would wait for “the right person to build a legacy”. “The culture here is special and we don’t want to risk destroying that – we want to enhance it,” he commented. “We like decisions to be made on the bakery floor rather than the boardroom, and their brief will be finding out how we can continue to win beautifully.”

According to the owner, Cornish Bakery enjoyed a “really good Christmas”, but has experienced a slowdown in trade in the early months of 2024, in particular affected by a damp February.

“We don’t like to blame anything, but it hasn’t helped that a lot of our locations are in coastal and tourist spots and exposed to the elements, so we’ve had some flooding and some store closures, although year to date like-for-likes are up circa 7%,” added Grocutt.

As part of the KPIs listed in the strategic report of its full accounts, Cornish Bakery also noted that it has been recognised as ‘Outstanding’ in the 2023 Best Companies To Work For, coming in 101st on the large companies list.