Greggs takes a bigger slice of convenience market

HIGH street bakery chain Greggs is on track to open its new £4.5m bakery at Penrith in Cumbria by the end of September, chief executive Ken McKeikan said last night.

The bakery will replace its existing operation in the town and will employ around 100 staff, which is fewer than the 150 employed at its current site but it means that the company will remain a substantial employer within the town for years to come.

It provides confectionery items such as flapjacks and Rocky Road bars to the Newcastle-upon-Tyne company’s network of more than 1,500 UK stores.

McKeikan has received plaudits for continuing to drive positive like-for-like sales and profits in what he described at a retail dinner organised by KPMG last night as “a success” given the generally difficult trading environment.

Sales in the year to January 1 were up 2.1% to £662m and pre-tax profits increased by 7.9% to £52.5m.

“Competition in the food-to-go market has become much more intense, so we’ve spent more time ensuring that we’re getting the basics right,” he said.

McKeikan said that a number of innovations had helped to drive the business forwards in recent years, such as devising a breakfast offer to boost sales at a time of day which had typically only generated around 5% of its total revenue.

New concept stores where food preparation areas had been moved onto a separate floor – giving more space on the shopfloor to chilled and ambient units had also helped to drive sales.

However, McKeikan said that the firm’s best prospects for growth lay simply with new store openings. The company opened a net total of 68 new stores last year – the highest in its history – and is targeting a net total of 80 new openings during its current year. These openings are supported by new production sites such as the £4.5m building planned for Penrith and the £16m bakery that opened in east Manchester two years ago.

“It doesn’t matter what innovations we introduce if more than 50% of people can’t get to a Greggs and don’t get access to our products,” he said.