BAKERY chain Aulds plans to open two or three new units this year after cutting losses by a quarter and increasing turnover by 6 per cent to just over £15m.
“We’ve got to a level we’re quite happy with and we’ll now be expanding again,” said managing director and chief executive Alan Marr, whose great grandfather founded the Greenock-based business in 1900.
“We’re now looking for new outlets. It was a case of removing unprofitable outlets that had been there for too long, cleaning the operation up and moving on from there.”
Mr Marr said the company, which has about 470 staff and 30 bakeries from Ayr in the west to Livingston in the east, had closed some shops that had been trading for 50 to 60 years and were now in the wrong place. Aulds was also forced to close its flagship Braehead store due to a planned lease-end redevelopment of the shopping centre’s food court.
“Braehead changed their food court downstairs into a restaurant area, so people like us and Costa and various others were basically removed to allow space for burger chains and sushi bars,” Mr Marr explained. “Our unit became a Yo! Sushi. We still plan to trade in Braehead again some time.”
The closure of the firm’s busiest store offset increased activity in the foodservice desserts and own label bakery operations, which supply trade customers from caterers to restaurant chains.
The jewel in the crown was Aulds’ partnership with Scotmid to provide branded in-store bakeries. The firm now has 50 of these in Scotmid stores, up from 33 in 2013.
“It’s been going very well,” Mr Marr said. “It gives us exposure in areas we weren’t in before and gives us a longer trading day (because Scotmid stores are open until 10pm).”
The accounts filed at Companies House for the year to end March 2015 show a 25 per cent fall in pre-tax losses from £849,677 to £640,134. “Although still restricted by negative margins, the group continues to invest in operational efficiencies and sales activities, which will continue to improve the group’s position in 2015,” the directors said in their report.
Mr Auld added: “We were a company predominantly dependent on the high street, which over the last ten years has not been a pleasant place to trade. We’ve had to change the business – to change with the changing market that we operate in – and we were slow to react to that at first. We’re now changing things in a big way to return to profitability, but it takes time.”
The accounts show a 3 per cent rise in the cost of sales to £13.3m and an 8.7 per cent increase in staff costs to £6.6m. Directors’ pay and pension contributions fell 21 per cent to £197,633.
Mr Auld said rapid changes in consumer tastes and trends was the biggest change in the market. “The speed at which things change has become greater because of the availability of knowledge,” he said. “People see things trending on the internet and want them available so they can try them. So we have to change with that. But we’re also creatures of habit who tend to go back to the same food that we’re familiar with again and again.”
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