So, the charismatic boss of Greggs, Ken McMeikan, has finally moved on. The kings is dead, long live the king.
GONE: iconic chief executive Ken McMeikan has moved on
And it was left to his replacement, former non-executive director of the bakery retailer, Roger Whiteside, to take up arms with reporters and City analysts at the launch of the company’s 2012 results.
Unfortunately for him, they were regarded by some as not that good, with one City analyst labelling them as “unsurprisingly disappointing”.
Fortunately for Greggs, however, Whiteside handled himself with aplomb, vastly experienced as he is in dealing with the press and the machinations of the City. He also pointed out he has been part of the team that has shaped the Greggs plan, so 2012 would definitely not be the “new normal” for the company.
Here British Baker looks at the strategy of the retailer and its plans for 2013:
One thing is for certain: Greggs will not open as many stores this year. The baker says it will revert to a more “normal” level of openings in the year ahead, planning, instead, between 50-60. This decision makes sense in the current economic climate. Too many retailers have ploughed ahead with new openings to their peril - Game and HMV, although not bakery, were guilty of this.
2012 was actually a record year for sales at Greggs, increasing as they did by 4.8% to £735m. However, much of this growth was, by the company’s own admission, driven by newly opened shops and what it described as “the rapid expansion of our new wholesale business”.
While the majority of Greggs’ business is high street-based, the retailer has diversified of late. First was its foray into motorway service stations and, more recently, the introduction of its wholesale range. This has worked well for the company and it is set to invest £30m for a new bakery in the Midlands to cater for this business channel.
First it was the turn of Greggs Moment to impress, when it was launched in late 2011. With the bowler hat-shaped light shades and its muted tones, Moment marked a radical departure for Greggs. Since its launch, Greggs has employed Tony Rowson, formerly a senior executive at Costa Coffee, to look at the brand’s potential for a UK roll-out. The company has said it will open three more before deciding on its “potential”.
You’d have to have been locked away in an Ivory Tower to miss that bakery is cool. Greggs is keen to tap into this resurgence and stress its bakery roots. For this reason, the company launched its Greggs the Bakery format in 2012. New chief executive Whiteside seemed pleased with the format when he spoke to analysts and the press. However, he was also keen to suggest the format would not work in every location. Concentrating on its artisanal heritage, the brand features additional ranges, including a £9.99 giant cupcake that has been a popular seller.
Greggs might be delivering record sales, but in 2012 it saw its pre-tax profit slip by 2.2% to £51.9m. Should the City be concerned by this? Perhaps. But the City is also sure of one thing when it comes to Greggs - the bakery retailer is ruthless when it comes to finding efficiencies. It delivered on savings of £10m two years earlier than a self-imposed 2012 deadline, thanks to the introduction of new bakeries. Now the company has set another target of saving £15m by 2014. It has also added to its team with the addition of Gavin Kirk, who joined from Mars UK in May 2012, as operational supply chain director, who will also be able to locate savings and, with the stewardship of finance director Richard Hutton, the company is in good hands.