IT was less than auspicious timing. As Greggs’ reality TV show More Than Meats The Pie hit the airwaves for the first time last night, investors in the bakery chain were still reeling from its first profit warning for more than four years.
Despite the icy conditions, for new boss Roger Whiteside the UK’s harsh winter has been a vicious baptism of fire. Drafted in less than two months ago after Ken McMeikan, his highly rated predecessor, jumped ship to caterer Brakes, Whiteside is already under pressure, with analysts urging him to put his foot on the accelerator of the planned store revamp.
They are right. The good news is that the 150 stores upgraded last year are already trading ahead of their older counterparts, so it is now vital that Greggs pushes ahead urgently with the 250 refurbs it has pencilled in for this year.
The new CEO must also keep looking for opportunities to expand the sites where Greggs-branded frozen food is sold in Iceland supermarkets and via Moto service stations – a business-to-business franchising model that’s helped fellow high-street sufferer Thorntons turn around its fortunes in recent months.
Unfortunately for Whiteside, though, Greggs’ real problem is the squeeze in disposable incomes that has driven consumers – even those spending an average of just £2 per transaction at the baker – away from the high street. Greggs may have proved that its pasties are VAT proof, but it’s rapidly learning that they’re not recession proof.
The baker’s shares have lost almost a fifth of their value in little over a month. There is little hope of an immediate improvement to trading, but the Greggs franchise is remarkably strong. A strong CEO ought to be able to turn the business around within the year, and start powering ahead again. Whiteside needs to prove he’s got the guts to go the distance, and fast.