A couple of years ago, Greggs fell victim to a rather unfortunate PR disaster. Someone with too much time on their hands attached a spoof tagline to the Greggs logo, which then somehow made its way to the top of Google. The line: ‘providing sh*t to scum for 70 years’.
Oh how the Prêt crowd sniggered into their avocado and crayfish salads. Yet plucky old Greggs just got its head down and kept growing. It now has around 1,700 outlets, up from 1,400 three years ago, as more and more people succumb to the sultry aromas of its signature sausage rolls and steak bakes, or indeed its new line of healthy flatbreads.
‘It’s a northern thing’ no longer serves as an explanation – the high street bakeries are as ubiquitous in Fitzrovia as in Falkirk. The rather patronising notion that Greggs’s popularity is inversely proportional to the nation’s economic fortunes has also failed to explain its steady expansion.
CEO Roger Whiteside doesn’t think it’s much of a conundrum. ‘It all emanates from the people who work in the shops, who are a reflection of the community they serve. They’re fantastic. I went along to one yesterday and tried to talk to the manager. She was literally like an octopus –'
Whiteside’s arms rise, tentacle fashion.
‘- in constant motion, sweeping, getting sausage rolls in the oven, serving customers. I thought to myself when you go home you must just fall asleep. But they genuinely love it. It’s their own baby, that’s the word they use. It’s a local business even though it’s part of a national chain. We invest a lot of time to keep that magic alive.’
Whiteside clearly deserves some of the credit too, not that he’d admit it. He explains that when he took over Greggs in early 2013, the firm was trying to compete on three fronts. It still had its traditional bakery business, but had also ‘inadvertently’ entered the nascent food-on-the-go market and was trying to get into coffee too.
After a review, Whiteside discovered that 80% of the firm’s business was in the food-on-the-go market. ‘We were still acting like bakery was the most important thing. That’s the big change. I said let’s focus on winning in food-on-the-go, because we’re not going to win a war with the supermarkets in bakery.’
The results since Whiteside took over have spoken for themselves. Profits, which had declined to a nadir of £41.3m in the 2013 financial year, had risen to a record £73m last year. The FTSE 250 firm now has sales of over £800m.
Animated, down to earth, engaging, Whiteside is in many respects the natural choice for Greggs chief executive. His CV makes for impressive reading too: NED at Greggs for five years, CEO of Punch Taverns and Threshers, MD at Ocado and head of food at high street behemoth M&S, where he spent the first 20 years of his career.
Whiteside started on the graduate scheme after studying economics at Leeds (‘in today’s world I probably wouldn’t have gone – there’s a broadening element to university but other than as a general education my degree has been of no direct relevance, and coming from a working class background I’d have had to have funded it somehow’), and clearly has fond memories of his two decades there.
‘When I first joined M&S, it was almost military. There was no way directly to the head office - your way in was as a trainee on the shop floor. There’s no substitute for that in retail. Every time I take a new role now, I go straight to the shop and spend a week or two there. Then when I go to the head office and they try to tell me how the thing’s run, I know more about it than they do,’ Whiteside says.
By the year 2000, he was an M&S lifer in his ‘dream job’ as head of food. Two things conspired to separate him from the mothership. The first was self-interest: his previously wide path to promotion had narrowed with the arrival of a new senior management team. The second was a kind of restless curiosity, which Whiteside still clearly possesses.
‘I was seduced by the internet revolution, where M&S had been slow,’ he says. Temptation came in the form of a surprise phone call – on April Fool’s Day no less - from a head hunter, inviting him to meet Tim Steiner, Jason Gissing and Jonathan Faiman, the ex-Goldman Sachs trio looking to bring the internet to food shopping.
‘They just blew me away. I’d never met people like them. It was a whole new level of smartness and positivity, and I felt I’d been allowed entry to a world that was previously not open to me.’
Whiteside left M&S with colleague Nigel Robertson to become co-MDs of what would later become Ocado. They’d just moved into a new office for start-ups when the auguries turned bad.
‘The dot com bubble burst nine days later. That office emptied so fast,’ he laughs. ‘Luckily we’d already begun talks with Charlie Mayfield at Waitrose, and there was enough momentum to complete the deal. Had it been a month later I don’t think it would have happened at all.’
Building Ocado with a team of six other people gave Whiteside an opportunity to explore his latent entrepreneurial tendencies, but he’s again at pains not to take too much credit.
‘History will judge I never had the courage to be a real entrepreneur. At Ocado we were creating something new and it was brilliant, but at the back of my mind I always knew I could return to a career if I needed to. It was a shielded form of entrepreneurialism,’ he says.
Whiteside’s involvement with the Ocado story ended a few years later, a classic case of too many cooks spoiling the broth. For the next decade, he worked as CEO of Threshers (then part of Guy Hands’ private equity empire Terra Firma) and Punch Taverns, both of which have come to be seen as turnaround successes.
Through these, Whiteside has developed a reputation for coming in and fixing things, fast. It brings to mind his other reputation for enjoying the adrenaline rush of motor sports and skiing – a common thread perhaps?
‘I like rapid change turnarounds, tackling problems and moving quickly. But I don’t like crisis – the factory’s burned down, what are we going to do?’
(Incidentally, Whiteside’s high octane proclivities seem to go back a way, to when he was growing up in Germany: ‘I had the idyllic childhood. My dad was in the Forces, so I grew up running around protected camps, making dens in the woods. I used to do my entire paper round without touching the handle bars. It was like living in Center Parcs for 11 years.’)
If there was any crisis at Greggs – a company with an enviable record of consecutive dividend payments dating back well before Whiteside, it must be said – it’s long since averted. So what’s the next challenge? What keeps Whiteside up at night?
‘I’m paranoid that somebody somewhere will invent something that will completely change the way we interact with customers,’ he says.
As in RoboGreggs? Or sausage rolls fulfilled by Amazon drones?
‘The problem with disruptive business models is they’re difficult to see coming,’ Whiteside replies. ‘But I’m still an optimist about the high street. I don’t believe the future is everybody sitting in their armchairs with a 3D box on their heads, living as an avatar. People still want to get out of the house – you’ve just got to give them a reason.’
Image credit: Greggs