Bakers square up for bun fight

Feb 20 2008 by Alex Turner, Liverpool Daily Post

Hampsons’ stores are spread throughout Manchester, Cheshire, Lancashire and Yorkshire, complementing Sayers’ existing presence in Merseyside, Cheshire and North Wales. Mr Quinlan said: “We are making a very strong statement about the Sayers name in the North West.

“Our business is based on people who are on the high street. Sayers has a very loyal customer base.”

But Sayers is now working in a trading environment that has changed dramatically in the last decade. However, the market changes have not been entirely negative. The sandwich market in the UK was worth around £1bn in 1990, but, with growth rates of 25-30% a year over the last decade, it is now worth more than £4bn.

Sayers biggest rival is stock market listed Greggs, which last October reported pre-tax profit of £42.2m on a turnover of £550.8m.

At the time, Greggs managing director Sir Michael Darrington reflected: “The market in which we operate has become progressively more competitive, with the proliferation of high street convenience formats operated by major supermarket groups, and the growth of numerous specialist takeaway food chains.

“This has occurred at a time when high street footfall has in any case been under pressure.” Competitive pressure increased even further when, earlier this month, it was reported that Marks & Spencer will open a standalone sandwich shop in London, called M&S To Go.

But currently high street convenience is epitomised by Subway, which opened its first UK franchise in January, 1996. In July, 2007, it opened its 1,000th store and it is aggressively targeting 2,010 shops by 2010.

Greggs‘s growth has been more sedate, but it still opened a net 134 stores between 2002 and 2006, when there were 1,336 Greggs across the country.

The company’s stated target is “to achieve a turnover of £1bn by 2010 through continued core growth and acquisition of new units”, taking the number of shops to in excess of 1,700.

And the challenge for Sayers doesn’t just come from food outlets, but also from coffee shops – a £900m-a-year industry in the UK – which has grown exponentially.

Costa Coffee and Starbucks each have more than 500 stores, despite the American behemoth only reaching these shores in 1998. And Caffe Nero, which had just 13 London stores at the end of 1999, now has around 350.

Mr Quinlan said: “The market has changed over those 10 years. Although we now see lots of Subways, Sayers has changed significantly over that period of time.

“Although we are a quality retail bakers, we are now doing an awful lot of takeaway product and we have a strong breakfast and lunchtime trade.

“Sayers does have its own healthy range in sandwiches, salads, fruits and fruit juices so we are extending that part of our business and promoting healthy eating.

Despite the difficulties, Mr Quinlan remains upbeat about the company’s prospects.

“Our product range speaks for itself,” he said. “We are attracting younger people into our shops.

“Yes, we have got a very strong traditional customer base, but we are winning new customers, too.”

alex.turner@liverpool.com