Greggs has expressed interest in buying up to 120 First Quench off-licences from administrators, reflecting a wider strategy of cherry-picking sites from struggling retail chains in its bid to open over 600 new stores.
The retailer is running the rule over 10% of First Quench’s 1,200 shops, which comprise Threshers and Wine Rack stores, after the chain went into administration last month. Greggs is also in negotiations to buy around 10 Ainsleys’ shops from administrators (see pg 5).
"We’re looking for more than 600 shops, so when companies go into administration, we are quick to make contact. We’ve looked at many companies and have put extra people into our property team to do this," Greggs’ chief executive Ken McMeikan told British Baker. "When a chain like Threshers goes into administration there is often overlap with existing Greggs stores, but if there are parts of its portfolio that are a good fit, we’ll be straight on the phone."
McMeikan emphasised the social benefits of such deals: "We can potentially offer employees from those companies in administration a secure future within Greggs, which is a financially strong and growing business."
Greggs plans to open 50-60 new stores next year and around 70 stores per year from 2011. Target regions include the south west, north west, north Wales and north-east Scotland. Indus-trial parks and sites at travel hubs, such as airports, are also a focus.
"I haven’t ruled out acquisitions, if the right company came along," added McMeikan. "In terms of opening shops in the south west, we first need to open a new bakery in that region. If there were an existing business that could provide both shops and a bakery in the area, we’d certainly be very interested. It would mean we wouldn’t have to build a brand new bakery."
According to Paul Moody, retail director at property consultancy Colliers CRE, Greggs will face tough competition for prime retail sites, despite the downturn.
"Greggs is a mature chain so it will have a refined and specific list of properties it is looking for," he said. "There is strong demand for good locations on the high street and sites at transport hubs from players such as Subway, EAT, and Pret, so Greggs won’t find it easy."