Profits spike at Ole & Steen bakery as management pledges to reclaim clientele base
Bakery Chain Ole & Steen Boosts Profits with Focus on Quality Over Quantity
Danish bakery and coffee chain Ole & Steen has seen a 25% surge in profits over the past year after doubling down on quality to win back customers. The company reported underlying profits of £4.89 million for the year ended December 31, 2024, and a 5% increase in turnover to £36.7 million. Ole & Steen's success was driven by a strong Q4 with a 17% like-for-like sales growth.
With consumer finances under pressure, the group attributed its positive momentum to an "outstanding" performance in the final quarter. However, the company's bosses are cautious about future expansion plans, stating they will focus on improving store performance, customer experience, and digital services before considering further growth.
Graham Hollinshead, managing director of the UK business, explained that Ole & Steen's strategy is about offering "value for quality" rather than just "value for money." The group aims to maintain its premium brand position by emphasizing the quality of its products and services. Hollinshead believes this focus puts the company in a good position as competitors lift their prices towards Ole & Steen's level.
In 2024, the bakery chain expanded its London production facility for consistent quality and cost efficiency and enhanced its digital capabilities, including extended delivery platforms and a web-based ordering portal for offices. On the horizon, Ole & Steen plans to collaborate with Danish chef Trine Hahnemann, launching an updated summer menu and a new open rye sandwich range in celebration of Midsummer.
Despite their recent success, Ole & Steen is not planning any concrete expansion plans and is instead focused on consolidating its strong market position in London. The company's current operating environment is challenging, with intense competition and surging costs, including increases in national insurance contributions and the rise in the national minimum wage.
Related Articles:- Previous- 1- 2- Next- Network Rail strikes lifeline £500m deal with British Steel- Top investors in Britain's GP surgeries oppose US private...- NatWest tipped to snap up rival TSB as bidders also circle...
How This is Money Can Help:- How to choose the best (and cheapest) stocks and shares Isa
Compare the best investing account for you:- AJ Bell- Hargreaves Lansdown- interactive investor- InvestEngine- Trading 212
[Affiliate links: If you take out a product, This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.]
- With its focus on quality and premium brand positioning, Ole & Steen's success in the finance sector might inspire investors seeking value for quality in their stock portfolio.
- As Ole & Steen continues to prioritize improving store performance and digital services, the bakery chain's growth in the food-and-drink industry could serve as a case study for other businesses in the lifestyle sector.
- The surging costs in the business environment, including increases in national insurance contributions and the rise in the national minimum wage, might lead companies to invest in cost efficiency measures like expanded production facilities, as Ole & Steen did with its London production facility.
- In a climate where consumer finances are under pressure, insurance companies might look into partnering with Ole & Steen or other similar businesses, offering financial products tailored to customers seeking premium quality items, thereby helping to maintain a better lifestyle.
