Welsh bakery chain Ferraris had its headquarters in Hirwaun, south Wales “severely damaged” after a fire broke out on 19 April.The first floor of the two-storey building at the Bryngelli industrial estate was badly burned by fire. Ten firefighters in breathing apparatus tackled the blaze with two hose reels, one main jet, a thermal imaging camera and two ventilation fans.There were no injuries and, despite the fire, all staff were said to be in work and production is continuing. Ferraris, which has 60 shops across south Wales, went into administration one week before Christmas.However, in February, the company was bought by Best Bakeries, saving 600 jobs. No-one at the company was available for comment.
Staying small has much to recommend it: better control, fewer headaches and the ability to sleep at night. But for those with stamina and ambition, expansion can bring with it a bigger income, status and perhaps the realisation of dreams.As Sandy Birnie, chairman of bakery giant Lyndale Foods says, some of it will be to do with the aspiration of the owners. “The upside is you create success and greater wealth, but if you get it wrong, it can destabilise your business,” he says.Anyone considering expansion needs to ask themselves if they have a management team with the capability to be able to expand. “It’s very different running a retail baker with half a dozen shops than going through the steps of 20, 100, and then 200,” says Birnie. “Just because you’ve got one very successful location does not mean you can replicate it somewhere else. Owner-managed businesses find it difficult to hand over to the management team to do that.”Once satisfied that you could staff a larger business, you need to understand why your retail bakery is successful in the first place, he says, then try to find a location that is similar so you can replicate it. “If you’ve got a highly profitable neighbourhood bakery you wouldn’t open that in an urban high street, because the product offering would be very different and so would the consumer.”Also, if a baker is considering opening one further outlet, there might be a temptation to open others at the same time. But this is not a good idea if the business has not got lots of surplus cash. “Most people would advocate you do it one at a time and that the next one beds down before you start the one after,” says Birnie.Those avid for expansion need to bear in mind that, on average, shops do not tend to make a profit until at least a couple of years in and the danger is that the business can run out of cash. Other considerations include rental costs, the deposit and whether there is a need to pay a premium for the desired site.COST CONSIDERATIONSConsideration should also be given to the terms of leases or freeholds. A six- to nine-month deposit is often payable for a good location – and then a premium on top if lots of people want the same premises. After that come the fit-out costs, which are a huge consideration.Birnie says there is no such thing as the best location to open a shop. Each one is different and it is the marriage of the location with what the bakery has to offer the consumer in a given area that counts. A combination of the best location in the area, but the worst product offering, or vice versa, will not work. It is the relevance of the product to the audience you are trying to attract in any location that is important. Those that get it wrong are those that think one size fits all, Bernie believes.MARKETING PERSPECTIVEKeith Joplin, managing director of retail consultant Joplins, based in Cleckheaton, West Yorkshire, says a retail baker opening a second shop should make sure the new unit is not far from the bakery or the first outlet. “They need to look at it from a marketing perspective and not just go on gut instinct.”Joplin says there is great satisfaction from success, usually measured in terms of number of properties and turnover, but it is crucial to ensure the second outlet does not drain the profits of the first one.He agrees with Birnie that staffing will be one of the major considerations. “Anyone operating an independent business will tell you that the actual running of the business is not a major problem, but employing people can be,” he says. “Someone running their own business has a passion for their customers, which is usually why they are successful as an independent shop, but when you expand, you are taking on other people. Can you find people who match your enthusiasm and standard of service?”BB Grout, an 11-strong Essex-based chain, opened its 11th shop, a freehold in Eastwood, last November. Director Giles Grout emphasises the importance of not having shops too far apart. All the shops are within a 12- to 15-minute drive of each other. Grout says successful expansion comes with experience. The new shop, which is in a secondary parade, has a lot of housing nearby, a school and a butcher, but he says it is still a gamble whether it works or not.There are few chains that have not made mistakes and BB Grout is no exception. “We opened one shop and went with it for two years, but it was not right and we made the decision to get rid of it.”The outlet did not make enough money, he explains, and it was a long distance from other shops, so it did not work logistically as the location was wrong for the type of shop. Fortunately enough, the company was able to sell on the lease fairly easily, virtually completely recovering the outlay. “But it took a lot of bottle,” Grout admits.no set formulaHobbs House Bakery, based in Chipping Sodbury (Glos), does not have a set formula when it comes to expansion. Sam Wells, director, says the firm has opened new branches as and when it has felt able to cope and when the right unit became available.Wells says the company is trying to make all the shops’ ranges similar because people like to buy the same products in each of its shops. The last store it opened, its fourth, was in Tetbury two years ago, where the last baker in town wanted to retire. Wells said it was a typically old-fashioned bakery, with a basic range at the time.”The owner was desperate not to see his bakery turn into an estate agent or an antique shop and pleaded with us to take it on. We didn’t particularly think it was the time to open another shop, but we opened it and it took off very nicely.”He says the customers took a while to adjust to a newcomer in town. “But they now think Hobbs is the best thing to happen to Tetbury in years,” he says. n—-=== Useful contacts ===Health and Safety Executive information line0845 345 0055Disability Rights Commission Helpline08457 622 633Royal Institution of Chartered Surveyors0870 333 1600—-=== Legal considerations ===National business advice service Business Link stresses the importance of understanding the legal obligations and restrictions for business premises.1) You must comply with building, fire and health and safety regulations, as you are responsible for the health and safety of employees and visitors.2) Stamp duty is payable on commercial leases and you may be liable for business rates, although in rented premises, these may be paid by the landlord.3) You must take reasonable steps to make your premises accessible to all, including the disabled.4) You must comply with the terms of any lease or licence agreement: there may be restrictions on times when deliveries are allowed or how you dispose of waste, for example.
Allied Bakeries says its Kingsmill brand is actually growing faster than Warburtons, fiercely rebutting claims to the contrary in Warburtons recent Bakery Review 2007.Allied said figures quoted in the review that suggest that Allied’s Kingsmill brand had lost market share across the UK in the year to July 14 are misleading.In fact, Kingsmill has grown market share faster than Warburtons, while other brands lost share, if performance in the 30 weeks after the Kingsmill relaunch up to 15 September (the latest data available from AC Nielsen) is compared with the 30 weeks prior to relaunch, Allied said.Allied said Kingsmill’s share grew from 15.6% to 16.9% (+1.3%) in value terms and in volume terms was up from 15.3% to 16.7% (+1.4%) during this period. In the latest four-weekly period Kingsmill’s share was up to 17.3% in value and 16.9% in volume.Over the same period, Warburtons’ share increased by a similar amount in value but in volume only grew share by 1%, said Allied.Warburtons had also cherry picked data and month-on-month comparisons to negate the success of the Kingsmill relaunch, Allied claimed. For example, in the North East a single month had been isolated to suggest that Kingsmill had seen a 19% fall in sales, when Kingsmill had actually grown share in the North East faster than any other brand, it said.Kingsmill’s share grew by 1.9 % in value and 2% in volume terms in the north east. Warburtons grew at 1.2% and 0.8% respectively.
Two-thirds of retailers (62%) listed on the London Stock Exchange issued positive trading statements in the third quarter of 2007, with 100% of all food and drink retailers reporting an increase in like-for-like sales, according to a new report.The level of positive trading statements was the highest since chartered accountancy Grant Thornton introduced its Quoted Retail Companies Index in 2003 and was double the previous quarter’s result of 31%.The number of negative trading statements fell to 15%, down from 19% in the second quarter. Only three retailers, all in the non- food sector, issued profit warnings, said the report.David Bush, head of Grant Thornton’s retail services team, described the results as extraordinary. He believed a further interest rate rise was needed to curb consumer spending, which “is continuing unabated”.Many retailers reported that margins improved in the third quarter, highlighting, Bush said, the scope to raise selling prices in the current economic climate.
Carr’s Milling Industries said last week that profitability in its flour business was “unsatisfactory” despite two price increases since August.In an interim management statement put out to coincide with its Annual General Meeting it said further price increases would be useful although these would be dictated by whether bakers were successful in getting further bread price increases.Despite claiming “strong trading to date” in its business overall, Carr’s said that there was a “risk to flour profits” and that the outcome for the year to 30 August 2008 would be influenced by the price of milling wheat for the month of August, which is currently difficult to predict.Group sales reached £24.6 million last year, up from £19.2m.
Costa Coffee has reported a “positive start” to the financial year, with sales up 28.4% in the 13 weeks to 29 May.Owner Whitbread said the coffee chain had benefitted from a “rapid expansion programme which has seen the total number of units increase year-on-year by 289 to 1,051”. Like-for-likes were up by 6%. Costa has recently signed franchise agreements for Hungary, the Czech Republic, Slovakia and Singapore. In a statement, Whitbread added: “The attractiveness of our brands to guests has been demonstrated by our good performance to date. We remain cautious, however, should the consumer environment become more challenging.” Costa is also donating its £150,000 profits from sales on 14 June to its Foundation. The money will go towards building five new schools in Costa Rica, Guatemala and Uganda.
A welcome update on the endlessly jaw-dropping Cake Wrecks blog – dedicated to “When professional cakes go horribly, hilariously wrong” – which Stop the Week reported on in February: author Jen Yates is releasing a Cake Wrecks book in late October. As a teaser, here’s one effort ordered by a customer – for reasons that shall forever remain unfathomable – and the baker’s brave but stomach-churning vision. “What is it?” you cry. “Go ahead, guess,” writes Yates. “Spaghetti with tomato-ey cream sauce? An ear? A cherry, Cheez-Whiz and regurgitation torte? Nope, nope and nope! Give up? It’s a foetus-with-an-iPod pie!”cakewrecks.blogspot.com
It’s not often that British Baker gets picked up by political bloggers. It turns out that the humble cupcake is all that’s needed to make the link. These colourful Tory-themed cupcakes were posted last week on a Conservative blog www.torybear.com, with the following caption: “There is only one way to celebrate the first day of National Cupcake week tomorrow”.
Aryzta revealed its UK and Irish business has been hit the hardest by the recession, as the Switzerland-based firm announced revenue losses in its Food Europe division.In a statement announcing its full year results for the year ended 31 July 2009, the firm, which focuses primarily on speciality bakery, revealed a drop in revenue of 2.2% to €1,137.2m (£1,047.74m) in its Food Europe division. Operating profit stood at €135,103 (£124,561.29), up 11.4%.The firm said its Irish and UK business had been most affected by the recession, and a result substantially reduced its cost base. Its, now fully commissioned, Grangecastle bakery helped enhance efficiencies.Its Food North America division saw revenue increase 12.5% to €555.1m (£512.01m), and operating profit increase 30.1% to €67,481 (£62,267.69).Aryzta chief executive officer Owen Killian said the economic downturn is reflected in the firm’s underlying revenues, which swung from double-digit growth to a decline, within the twelve month period. In the financial statement released by the firm, it said that in the recessionary period encompassing the latest financial figures, credit from banks became very restricted and consumer spending slowed. However it stated that it remained focused on cash generation and improving operating efficiency.Aryzta formed in August last year through the merger of Irish company IAWS and Swiss Bakery firm Hiestand.It is a mix of business to business and consumer brands, including Heistand, Cuisine de France and Delice de France. Its Food Europe division comprises its speciality bakery businesses which span across Switzerland, Germany, Poland, the UK and France.
A butcher has pipped a baker to win the World Scotch Pie Championship as Murdoch Brothers Butchers was announced winner of the 11th annual contest. But bakers did triumph in the most categories.Judged at Carnegie College last month, 85 bakers and butchers entered a total of eight categories a record number.Highest-placed baker in the Scotch Pie category was Airdrie-based Bon Bon Cake Shop, which achieved Gold 2nd Runner-Up. The winning bakeries included Nicoll’s Rosebank Bakery in Dundee in the Bridies category; Nevis Bakery in Corpach in the Savouries Vegetarian category; and Kassy’s Kitchen in Cowdenbeath in the Hot Savouries category. The Diamond award for hand-held steak pies went to Stuarts of Buckhaven. Charmers Bakery in Bucksburn won the Cold Savouries category.”The objective is to raise standards in the industry and we believe we have achieved that,” said event organiser Alan Stuart of Stuarts of Buckhaven.