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Greggs has the taste for expansion
High street baker Greggs wants to expand beyond 2,000 shops and revamp its manufacturing capacity, ideally achieving both without taking on any debt, its chief executive said.
The Newcastle-based group sells sausage rolls, pasties, sandwiches, cakes and bread from about 1,400 UK outlets.
"The potential growth opportunity for us is more than 2,000," Ken McMeikan said, revising up the firm's previous target of up to 2,000 outlets.
Mr McMeikan, who succeeded Michael Darrington as chief executive last August, said Greggs could target under-represented areas such as the South West, East Anglia and northern Scotland, and open more stores in business parks, airports and bus stations.
"Our opportunity is we've got to take Greggs to more parts of the UK. We're only serving one million customers a day, so there's another 59 million people out there that don't come into a Greggs."
Mr McMeikan, a former Tesco and Sainsbury executive, plans to open a net 10 new stores in 2009 before accelerating growth in 2010 with about 60 net openings.
He is also looking to enhance productivity from the group's 10 regional bakeries and a major restructuring is on the cards.
Following the example of the successful development of a central savouries unit in Newcastle, this could involve bakeries switching production to a smaller range of products but with higher volumes.
"If we don't change the way we currently service our shops with our bakeries then we'll run out of capacity way ahead of the (retail) growth opportunities that we have," said the CEO.
Greggs, which is strongly cash generative, ended 2008 with no debt and despite his big expansion plans Mr McMeikan has no desire to stretch the firm's balance sheet.
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Thursday 24 May 2012
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