The inside story of the rise of Greggs to the top

The story of the rise of Newcastle bakery giant Greggs is remarkable and inspiring.

The story of the rise of Newcastle bakery giant Greggs is remarkable and inspiring. And now the man who turned his family business into a national institution has written the first book on the company.

THE man who helped expand his father’s business from a humble bakery on Gosforth High Street to the largest bakery chain in the UK has put pen to paper to tell the remarkable story of Greggs’ rise to success.

Ian Gregg took the reins of what has grown to be the largest retail bakers in the UK in 1964 when he inherited the business from his parents John and Elsie.

The business began 30 years earlier when John Gregg first travelled the streets of Newcastle on his bicycle, delivering yeast and baked goods.

By 1951, and with the economy only beginning to recover from the Second World War, Gregg opened his first small site on Gosforth High Street, with a single shop and bakery at the rear.

In just two years, Greggs’ bread became a firm neighbourhood favourite and the business made an impressive £69, 15 shillings and sixpence profit in 1953. As a reward, the bakery manager was paid a hefty £12 a week for his efforts.

After John Gregg died in 1964, his eldest son Ian took over the family business, which then had a turnover of £70,000 and 15 staff.

However, this was not the career route that Ian Gregg’s parents intended their son to take.

“The first recollection I had of the business was delivering baked goods in the van at Seaton Burn,” says Gregg. “I had no intention of going into the business and it was certainly not what my parents wanted.

“They paid me through school and university and wanted me to have a professional career. I worked for a solicitors’ firm in Newcastle called Maughan and Hall, but when my father died at 55 of lung cancer, I decided to get involved in the business.

“I think one of the big benefits was, I didn’t know anything about business or baking. I came with a completely fresh mind and listened carefully to what other people said.”

With next to no business knowledge, he managed to grow Greggs substantially over the next few years, buying bakeries across the North.

In 1972, the firm moved into Scotland, rebranding an established bakery chain as Greggs of Rutherglen.

Next, it opened Greggs of Yorkshire after buying Thurstons and introduced Greggs of Manchester after buying the Manchester-based Price’s bakery in 1976.

However, it was a bit too much too quick, according to the bakery’s then ambitious young owner.

“We overstretched ourselves buying into Manchester,” he reflects. “Things were pretty tense for about 12 to 18 months as we had invested in 100 shops in Manchester. We didn’t realise how difficult it was to turn around a business that was losing money and was run down.

“We thought it would just need a lick of paint and an improvement of its products but it required a lot more heavy investment and things were definitely tight for a while.”

By 1983, after growing his family’s chain of bakeries from just one to 300, Ian stepped down from his role as managing director and handed the mantle to Michael Darrington.

A year later, with expansion well under way around the country including, for the first time, the Midlands, Wales and North London, Greggs became a listed company on the Stock Exchange.

In 1987, the firm began in earnest its now hugely respected mission to put something back into the community with the foundation of its own charity, the Greggs Trust, which later became the Greggs Foundation, to support communities close to the bakeries.

The charity has since raised millions of pounds for local good causes across the region, including £2.6m for Children in Need last year.

Greggs also runs 190 breakfast clubs across the North East, ensuring that 8,000 children in under-privileged areas start the day with a healthy meal. In 1994, Greggs bought the nationwide Bakers Oven chain, with its 424 shops, to take its total to around 930 by the end of the year.

Four years later, the firm’s store portfolio topped 1,000 and it announced to the Stock Exchange that its turnover had reached £291m. In 2007, Greggs opened its first late-night store in Birmingham, ready to satisfy hundreds of hungry customers until 3.30am.

Ian attributes the success of Greggs during the 1980s and 90s to Darrington, who was awarded a knighthood in 2004 in recognition of his services to business and to the community in the North East.

“He really drove the business forward and made a terrific job of it,” says Gregg. “Business profits under his stewardship rose from £1.5m to £50m in the 1990s. The business is undoubtedly what it is today due to his leadership. When he started in 1984 we had 300 shops and by the time he left in 2008 there were 1,400.

“Now Ken McMeikan is our chief executive and he’s taking the business further still. In 2009 we announced plans to open 500 new shops across the country and he’s taken sales to more than £350m, which is astounding.”

McMeikan has also taken the firm in new directions, selling frozen sausage rolls, opening shops in motorway service stations and launching new upmarket cafes.

Gregg adds: “The message that carries throughout the book is a clear one of business morality. There are too many fat cats out there creaming off company profits but that has never been the case at Greggs. We’ve always looked after our staff first, then our customers, then our shareholders but in a lot of places that’s flipped the other way round.”

The firm faced financial troubles as a result of proposals announced in March to place 20% VAT on all food sold hot, ending a rule which had previously exempted pasties and sausage rolls. After a public outcry the Treasury instead decided not to hit pasties with the tax if they are sold fresh from an oven but not kept on heated trays.

But this wasn’t the first time that Greggs was faced with the dreaded pasty tax.

“We had a terrible time with the pasty tax back in 1984,” Gregg recalls. “It was Nigel Lawson who over 20 years ago put VAT on hot takeaway food and many pasties and other items of hot takeaway food have had VAT on them since that time. The Government tried again this year.”

Although not yet finally completed, Gregg hopes his treasured history of the company will be published and sold, with proceeds going to the company’s charitable trust.

He is appealing to anyone with any information or images pre-1952 when John and Elsie Gregg moved to the bakery in Gosforth to get in touch with Michelle Dobson at Greggs on 0191 281 7721.

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