Bakers Delight franchise keeps on rising

The Bakers Delight franchise , Australia's most successful retail bakery chain continues to experience significant growth and will take its first slice of the American market in March 2007, with the opening of a Seattle store.

The announcement of its American expansion coincides with the opening of the bakery franchise 700th store, in Vancouver, Canada, trading under the COBS Bread brand name and its first Bakers Delight stores in the central business districts of Melbourne and Adelaide.

Bakers Delight joint CEO, Lesley Gillespie, said the retail franchise had opened 38 stores in Canada since 2003, and therefore felt confident to take on the more aggressive American market.

"Overseas expansion is an important long term business plan, and the American market offers a lucrative opportunity to tap into a potential customer base of 300 million people.

"When we first looked at expanding beyond Australia and New Zealand, we chose Vancouver, Canada as our entry point to the North American continent because of the similarities to the Australian market. Now that we understand the North American region we’re ready to tackle parts of the US.

“It was a logical step to approach America through Seattle because of its proximity to Vancouver. The cities share cultural and consumer similarities that we’re already familiar with,” explained Lesley.

Bakers Delight will fund its American expansion through Australian revenues. The North American market will continue to expand where it expects to operate over 100 stores within two years.

Similarly to Australia, the North American business will have both company owned and franchised bakeries. However, in North America the percentage of company owned bakeries will be significantly higher than those franchised; the aim is to increase this franchise percentage.

“The growth being experienced in North America means there are a lot of exciting franchise opportunities.”

According to Lesley, Bakers Delight will open 10 Seattle stores within 12 months and she anticipates these stores will generate more revenue than equivalent Australian outlets.

“Our only competitors in the American market are supermarkets. We expect our fresh bread and personal service, plus the size of the population, to generate revenues higher than the average annual sales per bakery in Australia, which is about $700,000,” Lesley said.

Bakers Delight is no stranger to international expansion, having entered not only Canada but also the New Zealand market. It now has 35 franchises in New Zealand and continues to open new stores.

In Australia, Bakers Delight is currently experiencing double-digit growth across all regions and is still finding opportunities for local expansion. The company recently opened its first Melbourne bakery in the CBD, Adelaide will follow suit early in the New Year. The Melbourne bakery is proving successful – Bakers Delight will look at other opportunities to open more bakeries in Australia’s CBD over the next 12 months.

Global sales turnover of Bakers Delight/COBS Bread is expected to reach $512M for the 2006/2007 financial year. The company currently holds 14.6 per cent share of a $2.42 billion bread market in Australia (Roy Morgan SingleSource Research, March 2006).