BAKE TO THE FUTURE
Forty years in business is the result of grit, determination, business smarts, a great product, a little bit of luck and innovation.
This is one of Australia’s high profile franchise stories and one that might be familiar: a small bakery in Hawthorn established in 1980 by husband and wife team Roger and Lesley Gillespie. Baking is in the Gillespie heritage - both Roger’s father and grandfather were bakers.
One store led to another, and by
1988 the couple had 14 outlets and were ready to embrace the franchising concept as a way to grow the brand and bring opportunity to other Australians.
Roger and Lesley handed over the reins of the business to son Aaron, who directs the north Amercian business, and daughter Elise and her husband David Christie, who run the Australian and New Zealand operations.
Today the bakery network numbers
650 outlets across Australia, Canada, New Zealand and the US.
In North America there was a six month slow down that’s now accelerating - the business opened five stores in Canada and doubled its US footprint.
“In the US we just opened our second store in Connecticut,” says David Christie. “We plan to build 10 bakeries in that area.”
In Australia the business directly employs more than 400 people, with a further 8000 to 9000 bakers and sales staff employed under the brand.
While Covid-19 has thrown a curve ball into 2020, disrupting business and forcing a freeze on capital investment in April as part of the business’ braking mechanism, the bakery chain has now reignited plans for growth.
In Australia the focus is very much on franchisee profitability, enhanced technology and store growth.
“Growth is less about total store numbers and more about profit at store level and store growth,” David says. “We will see growth over the next year but we will be looking at how we can get more customers efficiently.”
Technology and store formats are important levers for this and the company is testing a number of concepts. One concept is exploring the potential of contactless sales with self-serve kiosks to sharpen the efficiency and convenience of the customer experience.
“If that works, we can use it as a way to get to more locations without building a full-service store.”
The enforced shift to working from home for a big part of the population has diminished the need for CBD stores and the correlating shift to the suburbs opens up more local opportunities.
“We’ve got a very good outlook for neighbourhoods and strip shopping. We’re just working out where big shopping centres will sit,” David says.
While the mega centres have been severely impacted, particularly in Victoria, he is confident traffic will return.
DELIVERY AND DIGITAL
While delivery is not the crucial channel to customers that it is in fast-food, it has a role to play in the future of the bakery network.
“How people interact with grocery delivery is a few steps behind,” says David. “We’ve partnered with Uber
Eats and about 25 per cent work with them. We need to have a play in that space.”
In the grocery category online sales have risen to 10 per cent but 90 per cent of revenue is still from in store sales, and it’s important to stay focused on the in-store experience, David says.
“People tend to overestimate the short term and underestimate the long term impact of technology. The trend is pretty clear. A lot of people who have no interest in buying groceries online have been forced to do so.
“Big supermarkets have resources, and shown strategic intent to invest heavily in click and collect. The short term goal for us to provide a better experience in store.”
FAMILY VALUES
“We’re incredibly passionate about the business. That passion is evident in the second generation and we’ve navigated business succession.
“A big motivator is the relationship we have with our franchisees, employees, suppliers and community.”
The brand’s connection with the founders is crucial to the business.
“Without that connection I believe it would be just another business - not a family business. There might be an argument to say it might be bigger; it wouldn’t be the same.
“There’s been a lot of hard work and passion for such a long time in the business; it feels like I’m part of it, I’ve played a part in its growth and development.
“It felt right from day one, my first day in the bakery and I saw how easy it is to sell product.”
WHY FRANCHISING WORKS
David looks back at the pandemicplagued winter months as validation of franchising as a model.
“Having local business owners on the ground close to customers, the community, was invaluable through Covid. The speed at which they were able to adapt to new processes, look after customers, and their teams, was important.
“We’ve seen franchising, rightly come in for a lot of scrutiny, doing more in the community than just selling product. That’s an imperative for business, not a nice to have.
“A lof of employees join the network because of that relationship, intangible and tangible."