Greggs has started gathering intelligence on overseas markets as it prepares for international expansion. The company is already Great Britain’s biggest bakery takeaway operator, with 1,419 shops. But Greggs has plans to launch in other parts of the world in the longer term, says chief executive Ken McMeikan. Speaking to British Baker after Greggs topped the new BB75 league table of bakery retailers, McMeikan says Greggs’ expansion ambitions are far from satisfied.
Comparable big brands, such as McDonald’s, Subway and Dunkin Donuts, operate in more than one country and he suggests there was no reason why Greggs should not. So the bakery giant is doing preparatory research overseas, he tells British Baker. "Greggs will certainly sell further afield than the UK, but that is not the main priority for now. It is the UK first. I have said I believe there is opportunity for 600-plus new sites here."
However, Irish expansion is a more immediate prospect, he adds. The company currently only operates in England, Wales and Scotland. "We have now had property teams on the ground in Ireland for nine or 10 months, looking for continuing growth opportunities," he says.
New bakery location
McMeikan also reveals that Greggs’ new southern bakery will be based in the Wiltshire area although the exact location is yet to be confirmed. In October, Greggs announced that in order to fulfil its plans for expansion and ensure an effective distribution network, it would build an additional new bakery to support growth in the south, as well as replace its existing facility in the south. Speaking to British Baker at the time, McMeikan revealed its Twickenham bakery would move to a larger site in Southall in 2013.
For the same reason, the company’s Gosforth bakery in Newcastle is moving to a nearby site. "We want modern bakeries that serve 200-250 shops the current bakeries only serve 140 to 150," says McMeikan. "With the new bakeries, most of the extra space will be for logistics and storage, not for production itself."
McMeikan adds that the process of phasing out the Bakers’ Oven brand is running to plan. So far Greggs has converted 164 of its Bakers’ Oven shops, with 50 conversions left to do. It expects to complete these in the course of this year, probably by summer. "I’m very pleased with the way customers and staff have responded," he comments.
Greggs has now achieved a target, set last year, of harmonising product ranges, so that 80% of products are common across the whole of the company’s estate and 20% are local. "The 20% falls into different categories," he explains. "For example, savouries are 95% common across the estate, but the sweet category tends to be more regional products such as the Tottenham cake [a pink iced sponge] in London."
McMeikan also confirms that Greggs has now shed its loss-making Belgian business a withdrawal from Belgium was announced last year selling its 10 shops there to a rival bakery operator. All staff went with the new owner, he says.
He also reveals that Greggs has appointed Rod Wood, formerly of companies including Rowntree, Tesco and Sainsbury’s, as trading director. Wood, who describes himself on business internet network Linked-In as "a specialist in change management and cost reduction", will ensure that the retail and manufacturing sides of the business interact as efficiently as possible.
The company has also started trialling three new destination outlets, including a food-to-go format and a travel format, although existing traditional shops are doing a "really good job", McMeikan says.
With an overhaul of Greggs’ infrastructure nearing completion, scouts on the look-out for new sites around the world, a big daily giveaway in The Mirror just finished and a nationwide TV advertising campaign expected to start shortly, one thing is for sure, we’ll be seeing a lot more of Greggs in 2010.