Greggs’ leaning tower of pizzas
This is the true story of the struggle Ian Gregg had to save the Scottish branch of Greggs Bakeries. It took all the grit and determination of Britain’s number one entrepreneur but he was helped by a massive tower of pizzas in a story that very few people know. We laughed at the time, even though it was serious, because Ian insisted on calling them pisas.
I began working in Greggs of Rutherglen in June 1979 as area manager of a group of shops, mostly on the west side of Glasgow. I had no idea how hot the ovens were for Greggs; they were a fast expanding bakery and lunch-box that everybody loved but, behind the scenes, the perfect storm was brewing. Here is a synopsis of the facts as I remember them; I may not have them in correct chronological order.
- There were still only 42 shops, some in bad locations, and the investment that had been made in the bakery needed over 50 shops to break even.
- The Sales Manager had just recently been demoted. The guy who came in to replace her as Sales Director was good but with no experience in shop management nor baking.
- Several shops were running without a manager.
- One area manager was leaving after having had a heart attack. (I got his shops to manage)
- The manager of the bakery had given notice he was leaving.
- The person recently appointed as manager of the new catering units left by mutual agreement.
- A recently appointed area manager went off sick with depression.
- The Accountant was caught embezzling company funds and had been charged by police.
- The assistant accountant had been hiding significant losses in the flag-ship George Square shop (the person hitting the cash was his girlfriend).
- The Managing Director, who had been off ill, died of cancer.
- A new Managing Director was appointed. The Sales Director and Bakery Manager, who both expected to get the job, both left soon after.
- The new Managing Director stuck with it and stayed until he retired while making Scotland the most profitable region of Greggs.
I began in June 1979 and in July Ian Gregg caught me in the corridor to say that my first pay check would bounce because all checks were cancelled. It transpired that a senior executive had kitted out his new house at Greggs’ expense. A great introduction to what was to come.
Ian Gregg called a meeting of all middle management staff to review the situation. He explained that, until he found a replacement Managing Director, he would occupy the role himself. He told us that the Scottish operation was currently running at a loss week-to-week and this, obviously, could not be sustained. Sales of £105,000 per week would break even and we were hovering below £100,000. It was a catch-22. They were snowballing the weekly cash to fund new shop openings but that could only be sustained with higher sales and tighter control of waste, not to mention theft. The large supermarkets were selling bread as a loss leader and bread accounted for about 25% of Greggs’ business. Selected branches were allowed to reduce the price but this cut into margins that were already too skimp.
He then told us how a huge external contract for “pisa” bases was keeping us afloat but it was only for six months. The Canadian company McCains, famous for frozen chips, had commissioned a new factory in Scarborough but it was behind schedule. Greggs were bailing them out and they were bailing Greggs out. Below is a cutting from the Greggs staff newspaper of the time. It’s rather old and stained but readable.
The ladies in the photo were hand-cutting thousands of pizza bases a day until Don, the chief maintenance man, adapted a sheeting machine. They reckon they were the first in the world to mass-produce pizza bases. Gordon Thomson, mentioned in the article, died a couple of weeks after the meeting.
The contract really did provide breathing space to keep shop development rolling till sales were enough to maximise factory production and with this some profit. In 2024 there are now over 270 Greggs shops in Scotland and 2500 throughout the UK.
The leaning tower didn’t topple but I wasn’t with Greggs long. Ian Gregg went back south to build the business nationally and a new Managing Director and a new Bakery Manager were appointed. Things didn’t improve immediately and I moved on to the frozen food industry with Bejam, a chain that later became Iceland. Greggs was, for me, what they nowadays call, a steep learning curve. A few weeks after starting, I was given responsibility for the catering units (that had seen off two professional catering managers) on top of the shops I already had. Four of my shops didn’t have a manager. I ran away to another job; Ian ran away back down to England to find the new Managing Director.
An amusing anecdote; Ian Gregg styled himself as a modern executive and insisted that everyone call him Ian, not Mr Gregg. So the shop staff called him Ian but they insisted that it would be improper to call their area manager Bob. So I remained Mr Black.
In case you don’t really know much about Greggs, they were recently in the news when they overtook McDonalds as the UK’s favourite place to buy breakfast.
Hope you enjoyed my trip down memory lane. I had another trip down that lane this week; I went to visit the Leaning Tower of Pisa.
