New CEOs at Bakers Delight: challenges of Amazon, competition and cultural change

Inside Franchise Business: New CEOs at Bakers DelightHow Bakers Delight is facing up to the future with a new generation in charge.

Founder Roger and Lesley Gillespie have handed over the reins of their business to daughter Elise and her husband David. The younger pair took over the business earlier this year and have now settled into their roles of joint CEOs.

Eight years managing the Bakers Delight business in Canada has honed their skills and they are ready to steer the 600+ chain to a new phase of growth.

Elise and David intend to bring a freshness to the Australian business, she says.

“The main thing we want to do now is be innovative and nimble, take some youth and enthusiasm to move things a bit faster, to think more about growth, rather than defending our territory.”

Bringing in cultural change

Of course there will be change, but it is predominantly cultural change, she says.

“We’re not just changing for the sake of it. It’s about growth, sales and profits for the franchisee, and there’s an appetite for change in the network.”

There’s a sense of relief that Bakers Delight is remaining a family business, with longer term perspective, not a business driven by shareholder value.

But she admits the change may not be easy.

“People say they love change but it can be quite confronting.”

There will also be new initiatives designed to improve the customer experience – from a click and collect option to updating some store layouts.

And yes, some franchisees will need to reinvest into the bakeries so they are up to date, she says.

With artisan-baking boutiques at one end of the competitive spectrum and the supercheap breads from supermarkets at the other end, there remains a massive opportunity in the middle market, Elise says.

Amazon, supermarkets and the customer

David says the changes are born of customer demand – wehether that has been observed through product sales, customer reactions to marketing campaigns or through detailed market research.

“We’ll be shifting our focus to a group of customers who don’t shop with us as much as we’d like them to.”

So there will be initiatives to encourage time poor, health conscious young families to shop more often in Bakers Delight.

One advantage in the market is the niche focus. Unlike supermarkets, the business can continue to concentrate and improve on one area.

That, says David, is a huge advantage with the incoming threat of retailers like Amazon.

“If you look at what Amazon has done, it’s focused on the customer, given them something that we can’t do.

“So what can we do that others can’t, that we can do really well?”

The answer, he says, is the franchise component.

“We have locals in nearly every bakery, employing local people, being part of the community through footy clubs and schools. We make our products from scatch, it’s what we’ve focused on. Supermarkets have 100 different areas to focus on.”

Right now Bakers Delight has more than 600 stores across Australia – the long term target is 800, so there’s plenty of growth to come if the pair can pull off their expansion plan. It starts in 2018 with 15 new stores to open.

“We need to set our targets high. Our market penetration is strong in Victoria, and I see no reason why it can’t be the same in Queensland and New South Wales.”