Managers at Greggs feel they have found the recipe for success by establishing a family firm with a homely flavour. The business — comprising 12 bakeries, 905 Greggs bakery and sandwich stores and 239 Bakers Oven cafes — is not about trendy paninis and slick slogans: it is about humble pie.
The company's top-selling sausage roll and hot pasties are at the heart of its soaring growth. These, with takeaway sandwiches, make up two-thirds of its business, but there are no calorie-counted ranges or foreign breads. Fillings are simple and there is British variation: in Glasgow they prefer a long “scottie”, and the pride of Gosforth and the northeast is the “stottie cake”, a soft, flat loaf once made from leftover dough on the hearth.

Sales have grown by about 10% a year since 1999, totalling £377.6m in 2001, and this year the Newcastle-based firm aims to open four stores in Belgium. Success has come from canny acquisitions, no-nonsense training and giving as much autonomy as possible to regions and individual managers.

Greggs was started in the 1930s by John Gregg at a single shop and bakery in Gosforth. When Gregg died in 1964 his son Ian took over, gradually handing over the reins to Mike Darrington, and the firm went public in 1984.

However, Darrington had the same family mindset, and feels that his continuity has been good for the business. “I can't deliver good service to 5m customers; the only people who can are the shop staff,” he says. “The fact that they know that and feel important makes them feel good, so the customer feels good. Laughter is important and so is a pat on the back.”

Under his leadership the firm expanded — innovatively — by serving several shops from the same bakery, and taking over chains in Glasgow, Leeds and Manchester: but it was still renowned for good customer service and value for money.

In 1994 the firm doubled staff numbers overnight to 9,500 by buying Bakers Oven from Allied Bakeries. Now there are 17,243 employees, who still share the old values: 86% say there are “strong principles for treating customers well” and 67% praise their team's “strong sense of family”.

Terry Gallagher, a production supervisor at the scrupulously clean and largely mechanised bakery at Gosforth, likes the taste of his new employer.

“They carried over all of my 15 years of service when they took over my old company, so I get an extra five days of holiday a year,” he says. “Greggs has the top rate of wages and management helped me adjust to working in a large bakery.”

Ian Edgeworth, the group personnel director, says: “There is no magic to labour turnover. It is about creating an environment in which staff enjoy coming to work, trying to get people involved in our success, through shares and profit-related bonuses, for example, and seeing their shop as their own little business.”

Staff turnover is about 50%, modest for the industry, but almost a sixth of staff (2,486) have been there for more than 10 years.

Jean Grant, manager of the Chillingham Road store in Heaton, Newcastle, is typical: “They always emphasise that it is your shop and I have been manager for 18 years but still come in half an hour early every day because I want to,” she says. “I am left to manage things, and we get bonuses twice a year, a sharesave scheme and half-price food, which is popular.”

Greggs is caring and sharing too: there are links with local charities, and at the end of the day unsold bread goes to half-price stores in deprived areas to be sold in the morning. The firm also gives a healthy 1% slice of its pre-tax profits to good causes.