A new man in the Greggs boardroom

Jan 5 2009 by Andrew Mernin, The Journal

When Sir Michael Darrington stepped down from the helm of Greggs last year, it brought to an end a 25-year regime of expansion and left a legacy which would be tough for any incoming executive to live up to. Andrew Mernin meets Ken McMeikan, the new man at the top of the North East bakery empire.

IF only Newcastle’s football team had been as well run as its famous bakery chain, then maybe the St James’s Park trophy cabinet would not be as sparse as it is today.

In the last 25 years, while the Gallowgate fortress has endured an endless stream of managerial hirings and firings, across town in a plush corner of Jesmond, Greggs has been under the stewardship of one man – Sir Michael Darrington.

And in that time, as the Magpies have failed to deliver any major silverwear, the bakers have triumphed by opening more than 1,000 new shops across the country, and have even enjoyed a European adventure in Belgium.

But change is now sweeping through the senior ranks of the pasty-makers as a relatively young Scot sits in the managerial hot-seat following Sir Michael’s decision to call time on his Greggs tenure.

Enter Ken McMeikan – a former military man who worked his way from the shop floor to the helm of two of the largest retailers in Britain.

Mr McMeikan’s appointment as chief executive was relatively smooth, unlike Newcastle United’s managerial turmoil.

And it came with the assistance of lifelong Greggs man Darrington, who remains as a non-executive and has been advising his replacement on how to take the company forward.

McMeikan said: “I’ve been working with Mike as a non-executive since August and this has enabled me to get round the whole of the country and over to Belgium to visit the shops and the bakers.

“Mike has continued his involvement in the business and we speak regularly because I hugely value his experience over the last 25 years.

“He loves this business and wants to see it continue to grow and thrive, and it’s been as good a handover as anyone could ask for.”

But McMeikan, whose career has taken in lofty roles at Tesco and Sainsbury’s, has wasted no time in making big decisions which will significantly transform the business.

He was advised by Darrington to always consider the long-term consequences of his decision-making, and followed suit by announcing the closure of the Belgian arm and the rebranding of the Bakers Oven chain into Greggs.

The 42-year-old explains the logic behind the two bold moves with a map of the British Isles. Coloured dots pepper the country representing Greggs’s now truly national network of stores and bakeries.

A weighty pamphlet on his desk in Darrington’s former office outlines the baker’s future strategy which remains national expansion despite the current downturn.

Little has changed since Darrington moved out of his Jesmond den, save for a Leeds United picture in one corner.

“Growing up as a Scotsman living in England, it was difficult to find out about Scottish football teams in those days. My aunt, who had been in England for some time, told me to support Leeds United because most of the Scotland team played for them.”

In his short time in the North East, it would appear McMeikan has been welcomed with open arms into the Greggs family.

Our interview has been rescheduled to give him time to attend the funeral of Ian Edgeworth, a former Greggs director.

“There was a huge gathering of people from Greggs from the last 30 years. He retired three years ago but was involved in the business a lot.”

“I’ve been immensely impressed with the culture and the values of Greggs. We have people who genuinely care and genuinely love the business and have grown up with it.

“They are very proud that this is a business which started life in Newcastle, they are proud of its heritage and I like that.”

Stranraer-born McMeikan’s career started aged 16 when he joined the Royal Navy, where he would spend five years, including a short time serving in the Falklands War.

“I got to the Falklands just as the war was ending but I was very proud to serve in the Royal Navy.”

Next came his introduction into the retail world with a job on the shop floor at national shoe seller Sears.

His progression from the bottom rung on the ladder to the top allowed him to gain an insight into the inner workings of a retail corporation. “Working my way up from the shop floor has given me a huge advantage because I’ve never stopped appreciating how staff feel and what it feels like to be managed and lead.

“I’ve learnt that the small things are important, like feeling valued and having your view valued. If you start like that in life, you never lose the understanding of what it feels like when people aren’t listening to you.”

Before long McMeikan’s retail prowess shone through and he went on to join Tesco where he became a major player in its executive set-up.

His 14 years at the supermarket giant culminated in a mission to grow the brand in Japan as the chief executive in the new market.

However, the role was short-lived and within six weeks of flying out to Tokyo, he was on his way back home to take up the biggest challenge in his career to date.

“I have no regrets about any of the decisions I take but if I look back, I would have been enormously happy spending time in Japan.”

At a time when Tesco was looking to expand into new Asian frontiers, back home another supermarket heavyweight was struggling for survival and needed McMeikan’s expert assistance.

“In 2004 Justin King (now Sainbury’s chief executive) was putting together a team to lead the turnaround of Sainsbury’s and I was pretty excited by the prospect of being part of it. I had never been in that position of such a large organisation, to turn it around was going to take a lot of effort.

“There was no guarantee it was going to succeed but I believed it would. I believed with the right people and focus on back-to-basics good retailing, the business could be turned around, and in three years that’s exactly what happened.

“I had to lead the transformation of the stores and somewhere in the region of 130,000 people who worked on the retail side. It was my job to inspire confidence back into them and make Sainsbury’s the great business that it had once been.”

As well as reinvigorating Sainsbury’s flagging online operation, the retail director addressed the company’s problematic automated supply chain, its pricing policy and its product range.

By the time he left for Greggs, he was responsible for 453 supermarkets, the online food business and thousands of members of staff across the country.

“There’s always a time where you feel that you’ve done the job you set out to do.

“I was pleased with the existing people I met when I joined Sainsbury’s and when I left, there was a spring in their step.

“It was as good a retailing team you would get anywhere in the UK so I thought I’d left the business really strong with the calibre of team that was in place.”

Today McMeikan is facing up to a very different challenge to the Sainsbury’s transformation.

As public-facing businesses struggle to keep their heads above water, Greggs seems to be relatively well-placed to ride out the economic crisis.

In its most recent trading update, the company posted solid trading figures for the 25 weeks to December 6, with like-for-like sales growth of 3.8%.

It laid out plans to open somewhere in the region of 40 new stores nationwide and said it was preparing for a year of accelerated growth in 2010.

McMeikan has also hinted at international expansion, despite Greggs exiting Belgium where its 10 shops have been making losses for five years.

In the new year he is planning a number of international fact-finding missions in search of potential new markets for Greggs – although he remains tight-lipped on where or when.

“I can’t say where I’m going. There are countries that I’ve already been to with other retailers so I’ve got a good sense of parts of the world that I think Greggs might well have a future in terms of expansion.

“The growth opportunities in the UK are still significant but for the longer- term plan for growth over the coming years, I’ll start looking at some of those countries very seriously.”