Ken McMeikan: Meet the bakery chain chief on a roll

The Business Interview: The man who is leading Greggs' recession-defying plans to open another 600 shops on the high street
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The Independent Online

Ken McMeikan, the chief executive of Greggs, served under some of the retail sector's most-respected leaders before he took the helm at the bakery chain in the summer of 2008.

He is particularly effusive in his praise of the leadership skills of Sir Terry Leahy, the current chief executive of Tesco, and Sir Ian MacLaurin, his predecessor, after spending 14 years at the retail giant. Mr McMeikan also describes Sainsbury's chief executive, Justin King, as "one of the most naturally gifted communicators" after his four years at the grocer as retail director.

But Mr McMeikan's views on managing people were also heavily influenced by his first job – in the Royal Navy aged 16 back in 1981. Later, he was sent to the Falkland Islands towards the end of the war in the early 1980s. Mr McMeikan says: "The services taught me the importance of teamwork, preparation, planning and how to move large numbers of people and to get them in the right place at the right time."

At Greggs, Mr McMeikan is now mobilising his troops for an assault on the British high street. The bakery chain, which has more than 1,400 shops in the UK, said last month that it plans to open a further 600 shops.

"The growth opportunity for Greggs is quite huge. The shop growth is really just one part of the growth opportunity. I believe Greggs has the opportunity to expand internationally," says Mr McMeikan, while stressing that overseas is not a "short or medium term priority".

Certainly, Greggs has a loyal army of customers. It serves nearly 6 million consumers who tuck into 2.5 million sausage rolls each week. Mr McMeikan says: "I love the sausage rolls. I think they are the nation's favourite. There is a fan club on Facebook for the [Greggs] sausage roll."

To help drive its expansion, the chief executive revealed that Greggs' property team is considering acquiring about 100 stores from Threshers owner First Quench Retailing, which collapsed into administration at the end of October. FQR's estate of about 1,200 stores also includes the Wine Rack, The Local and Haddows fascias. He said: "Our property team is looking at the Thresher [and FQR] estate. We look at every chain that goes into administration. It would probably be in the region of less than 10 per cent of the estate."

In addition to the growth potential, there were a number of other reasons why Mr McMeikan joined Greggs. He says: "The company was strong. It had continued to deliver on EPS [earnings per share], was cash generative, had no debt and had performed exceptionally well for shareholders. It had an excellent baker heritage and it is not uncommon to meet a shop manager who has been there for 40 years."

He also joked that jobs at Greggs do not come up very often, given that he is only the third chief executive since John Gregg founded the family run bakery in the 1930s. When John died in 1964, his son Ian took the reins. But since Mr McMeikan became chief executive he has overseen major changes. "There was a recognition to change from a position of strength. We have had the single biggest year of change in Greggs' history."

Since 2008, the bakery specialist has announced the rebranding of its Bakers Oven shops to Greggs – creating a single national brand; the closure of its Belgium operation; harmonising the product range to be 80 per cent national and 20 per cent local; and completing the change from a decentralised to a centrally run business. Greggs has also completed a major review of its supply chain and concluded that its current model, which is built around regional bakeries that deliver fresh products to its shops, is a "competitive advantage as well as being a profitable part of our business."

On the decision to exit its loss-making Belgium business, Mr McMeikan says: "From a people point of view, it was a very difficult. But from a business perspective, it was not a difficult decision because the growth and profitability opportunities are obviously in the UK." He added that 51 out of 53 jobs in Belgium were secured after another company took the business forward. For the 16 weeks to 17 October, Greggs – which has continued to trade robustly during the recession – posted underlying sales up 0.2 per cent. But for the foreseeable future it is Greggs' UK employees who represent the future of the business. Mr McMeikan – who eats Greggs food every day at its head office in Newcastle – says his favourite part of the job is visiting shops on Friday each week. But he is keen to stress that Greggs has already removed all added hydrogenated and transfats from the products that it bakes. It also plans to ditch artificial colours by the end of this year and artificial flavouring in 2010.

Mr McMeikan believes firmly in not letting staff know he is visiting a shop. "I believe you get the best out of people if your visit is unannounced." However, once the shops know the chief executive is in town, he says he has to "jump on a train" to where they are not expecting him. "I will sit down and have a coffee with them and ask them how it is. What matters is whether you do anything with it after they have told you something. That it when they build trust in you."

The Ukranian actress Milla Jovovich has admitted loving Greggs, but these days the brand is more associated with the British comedian Paddy McGuinness who fronts its advertising campaigns. Two thirds of Greggs' sales come from sandwiches and freshly baked savouries, such as pies and pasties. Mr McMeikan seems to be loving the challenge at Greggs, but his career path has not always followed a straight line. For instance, Sainsbury's Justin King poached Mr McMeikan to join Sainsbury's just four weeks after he had started a new life as Tesco's chief executive in Japan in 2004.

While Sir Terry and Mr King have helpd shape his approach to management, Mr McMeikan is also a firm believer in the employee-centric philosophy of Greggs' management team and founding family: if you invest in, and look after, your staff, they will take care of customers, and shareholders will benefit. In short, this approach seems to be partially reflected in McGuinness' current slogan: "Greggs the bakers – ready when you are".

Ken McMeikan: Footwear to pastries

* Appointed chief executive of Greggs in June 2008, having been retail director at Sainsbury's for four years. Before this he was at Tesco for 14 years, where his last role was chief executive of Tesco Japan. He was a retail manager at British Shoe Corporation for four years until 1990.

* Spent five years in the Royal Navy, as an electronic warfare operator between 1981 and 1986. Served in the Falklands conflict.

* Supports Leeds United and Celtic Football Club. The last book he read was the former Liverpool legend Kenny Dalglish's autobiography.

* Listens to Coldplay on his iPod, but plans to see Beyonce with his daughter this week in Newcastle.

* Has five children and spends a lot of his free time watching them play sports ranging from netball and hockey to rugby.

* Lives in Hexham, near Newcastle.