Greggs chief quits to join Brakes

Shares fall on news of Ken McMeikan’s departure

Ken McMeikan, the chief executive of Greggs who brought olive sticks and walnut bread to the bakery chain and fought a battle with the government over taxes on its more traditional fare, is to leave the company to take the helm at Brakes, a food supplier to pubs and restaurants.

Derek Netherton, chairman of the Newcastle-based group, said Mr McMeikan, who joined Greggs in 2008 from J Sainsbury and also briefly ran Tesco’s Japanese operations, “led the company through the major changes that have put us in a strong position for the future with a clear strategy for growth in a difficult environment”.

While underlying sales fell in recent months, a number of initiatives have pushed up total revenues, including new shop formats that offer “the theatre of bakery”, contracts to supply the British military overseas and an agreement with Iceland Foods to sell Greggs-branded “bake at home” products.

Greggs’ challenges had looked set to increase earlier this year, after George Osborne, the chancellor, unveiled plans to put a 20 per cent VAT charge on hot takeaway foods. But a concerted campaign by groups including Greggs led to the “pasty tax” being scrapped five weeks later.

Clive Black, an analyst at Shore Capital, said Mr McMeikan was also due credit for modernising the supply chain and upgrading the product range. “We thought he did a very good job. The disappointment among Greggs shareholders will be substantial today.”

Shares in Greggs rose more than 50 per cent during Mr McMeikan’s tenure.

Brakes, founded more than 50 years ago as a poultry supplier to caterers, now has operations in the UK, Ireland, France and Sweden and in 2007 was bought by Bain Capital, the private equity group co-founded by former US presidential candidate Mitt Romney.

It said in June that while the fragile UK economy continued to make trading tough, revenue growth was “strong” and margins had remained stable. It is embarking on a £250m investment programme focusing on “network infrastructure, product development, IT and people”.

Philip Jansen, Brakes chief executive since 2010, will become chairman when his successor arrives, while current chairman, Dwight Poler – a Bain executive – will remain a director.

Under Bain’s ownership, Brakes made a number of bolt-on acquisitions in 2008 and 2010 and launched a specialist bread range, La Boulangerie, in 2009.

“With a background of world-class leadership in food, food service and retail, Ken has the perfect mix of experience to lead Brakes,” Mr Poler said.

Mr McMeikan will remain with Greggs until the group finds a new chief executive. Analysts said they thought an external appointment was more likely than the promotion of an internal candidate.

Shares in Greggs fell 14p to 472.50.

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