Major bakery chain to open 40 new stores in 2025: Boss reveals major expansion plans despite High Street revolts over bakery being ‘ultimate sign of gentrification’

Major bakery chain to open 40 new stores in 2025: Boss reveals major expansion plans despite High Street revolts over bakery being ‘ultimate sign of gentrification’

Gail’s plans to open up to 40 more stores next year and hire another 1,000 staff as the bakery firm presses on with expansion plans despite bitter ‘gentrification’ rows.

The upmarket chain has enjoyed rampant growth over the past three years and is now valued at an estimated £500million – more than double the £200million in 2021.

Gail’s has also expanded from 70 bakeries to 150 over the same time period, having only opened its first site less than two decades ago in London’s Hampstead in 2005.

The chain’s chief executive and co-founder Tom Molnar has revealed he is targeting £300million in sales next year amid plans to open another 30 to 40 bakeries in 2025.

Gail’s believes it has benefited from the high street crisis of empty stores, taking on sites with favourable deals from landlords desperate for rent income after a closure.

Now, it has also opened its first outlets at major travel hubs – first at London St Pancras train station on December 12 and then at London Bridge station today.

The site at St Pancras was described by the bakery chain’s property director Brett Parker this week as being ‘designed to reflect the warmth and generosity of Gail’s in a slightly more formal way than is perhaps seen in their London village bakeries’.

He added that it was a ‘cross between a business lounge and a bakery’ and has a ‘creative acknowledgement’ of New York’s iconic Grand Central railway station.

Gail’s bakery opens its new outlet at Walthamstow Village in East London on October 3

Customers visit the Walthamstow Village branch of Gail's after it opened following a backlash

Customers visit the Walthamstow Village branch of Gail’s after it opened following a backlash

Gail's chief executive and co-founder Tom Molnar is targeting £300million in sales next year

Gail’s chief executive and co-founder Tom Molnar is targeting £300million in sales next year

It comes after Gail’s opened its 150th UK site on October 24 in Watford town centre -almost exactly two years after reaching a 100-store milestone on October 27, 2022.

Mr Molnar told The Sunday Times last month that Gail’s had benefited from the crisis on high streets, which saw net store closures of 11 shops a day in 2023.

The 58-year-old said: ‘There are lots of empty sites on the high street. You get really attractive deals (from landlords). That’s been really fundamental to us.

‘The first day we opened in Cobham, I sat down having a coffee next to this older gentleman. He said: ‘You know what this place was before it was a bank? It was a bakery’.

‘So it was a bakery built to be a bakery. Then it became a bank. And now it’s back to being a bakery again.’

But Mr Molnar also admitted that prices will have to go up because of Chancellor Rachel Reeves’s Budget that will cost Gail’s up to £2billion, due to changes to national insurance contributions, the minimum wage and business rates relief.

Gail's pro-Brexit and anti-lockdown chairman Luke Johnson is pictured at the Soho branch

Gail’s pro-Brexit and anti-lockdown chairman Luke Johnson is pictured at the Soho branch 

Gail’s has only seen rapid expansion in recent years since the pandemic as it began pushing its model of upmarket coffee and bakery products to Britons whose savings had grown during successive lockdowns.

Luke Johnson: Oxford medical student who made millions in pizza

Gail’s chairman Luke Johnson began his career at 18 when he organised parties as an Oxford medical student.

The entrepreneur worked at TV-AM as an assistant to former Conservative MP Jonathan Aitken, who was an investor in the broadcaster, and was also an analyst at investment bank Kleinwort Benson.

But he made his fortune with Pizza Express after buying it with fellow medic Hugh Osmond for £8million in 1983. It grew from 12 outlets to more than 200 and the pair then floated it on the stock exchange 10 years later.

He also co-founded investment firm Intrinsic Value in 1999, and invested in businesses such as Belgo Group, which owned The Ivy and Le Caprice.

Mr Johnson set up Risk Capital Partners in 2001 which owns stakes in a range of businesses including Brighton Pier Group and Gail’s.

He also became the youngest ever chairman of Channel 4 in 2004 and donated money towards the Brexit campaign before the EU referendum.

Mr Johnson spoke out against pandemic restrictions, saying in October 2020 that the country could not afford another lockdown.

And in a column for The Sunday Times in 2019, he said he worried that ‘climate alarmists are unduly pessimistic and anti-business, and that global warming is used by some as a convenient stick with which to beat capitalism for purely political reasons’.

The chain has become hugely popular with middle-class customers around London and has also expanded into towns and cities across South East England and beyond in recent years.

Its bread is made daily in one of five large bakeries at Hendon in North London, Milton Keynes, St Albans, Manchester and Bath – and then distributed across its network with deliveries between 4am and 6am.

But the chain has also faced a ‘gentrification’ backlash in some areas when trying to open new stores – most notably in Walthamstow Village in East London, where residents launched concerns it would put other local shops out of business.

Hundreds of people signed a petition against a new branch there, in the name of ‘protecting the unique identity of our community and safeguarding the soul of a beloved neighbourhood’.

Residents told MailOnline at the time that the Gail’s branch was the ‘ultimate sign of gentrification’ and would see independent coffee shops lose trade.

Some business owners even claimed local resistance is down to the firm’s pro-Brexit and anti-lockdown chairman Luke Johnson, who has called some eco activists ‘alarmists’.

There was an apparent feeling that Mr Johnson did not align with the politics of the area, which backed Remain in 2016 and has had a Labour MP for more than 30 years.

People in the area claimed the plans were ‘not great for coolness factor’ and the chain was ‘probably out of reach price-rise for a lot of the community’.

Others pointed out that while they liked Gail’s and had visited other branches, they did not agree with it coming to Walthamstow and would instead support local firms.’

However, the Walthamstow branch eventually opened on October 3.

During this year’s General Election campaign, the Liberal Democrats targeted constituencies where there are Gail’s outlets – believing there were Conservative voters who could be prepared to swing – in a scheme launched by Sir Ed Davey and dubbed ‘Operation Cinnamon Bun’.

Objections were then again raised last month when Gail’s confirmed it was opening in Primrose Hill next year, amid concerns the picturesque shopping hub could be ‘steamrollered’ by a new outlet there.

Gail’s has faced a ‘gentrification’ backlash in some areas when trying to open new stores – most notably in Walthamstow Village in East London, pictured on its opening day in October

Baristas serve drinks to customers at the branch of Gail's at Walthamstow Village in October

Baristas serve drinks to customers at the branch of Gail’s at Walthamstow Village in October

Taking over from an independent delicatessen, which was forced to close due to entering liquidation, the company will now have three outlets within a ten-minute walk from each other – the other two being in Camden Market and Parkway.

Community campaigner Phil Cowan told the Camden New Journal: ‘The proposed store will represent yet another rung on the ladder towards identikit retail environments, which is both sad and ironic considering that people so enthusiastically celebrate Primrose Hill just as it is – a proudly independent village.’

Outside of London, Worthing locals also attempted to stop the opening of the chain in their seaside West Sussex town in August, but were unsuccessful and it opened on September 19.

The Worthing Society, which aims to ‘preserve’ and ‘safeguard’ the town’s heritage, had expressed concerns the bakery’s aesthetic might not harmonise with the historic street where it was opened.

The arrival of a Gail’s in a town is however claimed to be a boost for property prices and a strong indicator that an area is on the up.

Customers stand in line as they visit the Gail's branch in Walthamstow Village in October

Customers stand in line as they visit the Gail’s branch in Walthamstow Village in October

And Mr Molnar previously told the Mail that it was a huge compliment that people ask him for a Gail’s in their locality.

Last month Gail’s parent company, Bread Holdings, hired Goldman Sachs to prepare an auction amid speculation it could be valued as high as £500million.

Bloomberg then reported last week that food investment firm McWin Capital Partners was in talks to buy the chain to pre-empt a sale process.

McWin – already a backer of the parent company – already owns exclusive franchise agreements for Subway and Popeyes in some European countries.

Retail expert Jonathan De Mello, founder and chief executive of JDM Retail, told MailOnline: ‘Gail’s are a great British success story, and continue to motor ahead with their expansion plans across the UK; seeking new avenues for expansion given their increased presence on the high street.

‘This is exemplified by their recent push into transport hubs; which makes eminent sense given the nature of their product – and I expect them to open in lots more transport hubs in London and beyond over the next couple of years.

‘Gail’s products have proved very popular with a broad customer base seeking quality – the queues out the door of various branches illustrate this, and the potential scope for them to expand further.

‘As they expand, they must be mindful of potential cannibalisation of sales of existing outlets – but so far, there is clearly a lot of demand and still limited supply. Opening up in new types of locations like transport hubs enables them to tap into a new customer base – and is a smart move.’

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