Bakers square up for bun fight

Feb 20 2008 by Alex Turner, Liverpool Daily Post

Alex Turner discovers how famous Liverpool bakery Sayers is gearing up to face the challenge of consumers’ changing tastes

IN HIS 2007 tribute to the North of England, Pies and Prejudice, cultural commentator Stuart Maconie argued that, if the North claimed independence, the flag would feature “our twin emblems of the Greggs pasty and the High-Visibility Tabard”.

But the idea of pies, pasties and pastries being the food of the north of England is increasingly under threat – by changing tastes, warmer weather and healthier eating trends.

And, as Maconie highlights, it is the Greggs pasty, rather than the pasty itself, that has quietly conquered the North.

All of which is bad news for Sayers, which last week launched a £1m rebranding programme – its second rebranding in just eight years – as it seeks to revive its flagging fortunes.

Its store in Central Square, Maghull, was the first to benefit from the makeover as rustic red replaced electric blue, a move that the company claims was done to reflect its heritage.

Michael Quinlan, managing director of Lyndale Retail Bakeries, the owner of Sayers, said: “We have had our current brand for a number of years since the beginning of 2000 and we have been out and asked customers what they expect from a retail bakers in terms of service, products and what the style and appearance of shops should be.

“It really is a result of all that feedback that we have gone for the brand image that we have got in Maghull. We have gone for a fresh, modern, contemporary look that reflects the heritage of the business and the expertise and experience that the business has built up over 96 years.”

And what a heritage.

The Sayers story began in Old Swan, Liverpool, with a couple of newly-weds baking cakes in their kitchen for friends and neighbours.

That was in 1912, but, nearly a century after Fred and Lillian Sayers first took out their mixing bowl, the current owners are again trying to find the recipe they hope will lead to a rise in fortunes – and profits.

It is much needed as the company has continued to struggle in the years since its previous rebranding.

Sayers lost money in every year since, peaking at pre-tax losses of £1.89m in its last published accounts, for the year to September, 2006. Its turnover, of £34.4m, was also the lowest since the rebranding.

That was in part because of problems with its wholesale business, which suffered a big hit in 2006 when it lost its contract to supply supermarket group Kwik Save, resulting in 200 job losses at Sayers’ Norris Green bakery.

“We are only a retail business now, we don’t make products for anyone else,” said Mr Quinlan.

“In 2006, Sayers did do a lot of business with supermarkets like Kwik Save and the demise of that business affected Sayers quite considerably.

“The action we took in 2006 was in response to that. What we are doing now is about our retail business.”

THE new ingredients in its product mix will include tiger bread, milk loaf and choc fudge square, while the company will also extend its stores’ opening hours, with more operating on Sundays.

But it is not just a few new products and a coat of paint that Sayers are placing their hopes in.

It also hopes to capitalise on its name, which it believes commands loyalty among its customers.

The number of Sayers stores will double to more than 200 as its sister company, Hampsons, is brought under the Sayers name.

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