In November last year, Gail’s, the upmarket bakery chain, announced it would be opening a new branch in Primrose Hill, a particularly chichi corner of north London, on a street where terraced houses can fetch up to £6million.
It erected smart hoardings, with a picture of a chef carrying a tray of freshly cooked quiches, saying: ‘Gail’s – we’ll be baking here soon.’
This was quickly defaced with graffiti – polite, of course, this is Primrose Hill, after all – which said ‘Fail’s – Go Away’.
Gosh! What on earth has this company done to upset the locals? Indeed, what has this chain done to upset all sorts of people – its mere presence seems to provoke residents, from Walthamstow in trendy east London to fashionable Lewes, East Sussex, into a rage.
To find out, the Daily Mail spent the day in, and near, its Primrose Hill branch, which opened less than a month ago.
And the sharply differing range of opinions from the locals makes clear that Gail’s is more than just a bakery chain with 169 branches, selling £4.90 loaves of sourdough and £4.40 oat milk lattes.
It has become a lightning rod, attracting all the hopes and fears about the state of British society and the economy. And not just because it was revealed this week to be throwing out binloads of unsold sandwiches and buns despite its ‘zero food waste’ policy.
It seems strange that so many people really don’t like it. Because there is no doubt Gail’s, over the last few years, has been one of the great success stories on the British high street – in an age where there have not been too many of those.
Harry Wallop visits the new Gail’s bakery in Primrose Hill, north London
In the year to February 2024, it achieved a turnover of £232 million, up from £182 million the previous year, according to the most recent accounts it has filed at Companies House.
That’s a very impressive 27 per cent increase in sales, when the overall bakery and sandwich shop market grew reportedly by a mere 4.7 per cent.
A tiny part of that growth will have come from me. I confess, I occasionally treat myself to its sticky, chewy cinnamon buns, the number one Gail’s best seller. Yes, they cost £3.60 – which is more than four times the cost of a similar pastry in Tesco – but Gail’s version is a superior indulgence.
Since then, it has continued to go gangbusters, thanks to the fact it keeps on opening new shops – ten in the first two months of this year, and three planned over the next few weeks: in Stoke Newington, north London; Macclesfield, Cheshire; and Ely, Cambridgeshire.
But even taking the boost from new shops into account, it is still doing well. ‘Gail’s is growing faster than the market,’ says Maria Vanifatova, chief executive of Meaningful Vision, an analysis company that specialises in the eating-out market.
‘They are quite expensive but they have found their audience and they are focused at targeting them – the middle class and upper class. It’s very much about lifestyle. I think Gail’s is the Waitrose of sandwich and bakery shops.’
Many Primrose Hill customers say it is an affordable luxury. Serena Arkus, 48, has bought a £4.90 waste-less sourdough loaf. ‘The bread is just very good, it’s fresher than most other places. Yes, it is expensive for bread. But look, it depends on your priorities … Everyone spends their money how they want.’
Another fan is Jonathan Brandling-Harris, 38. He has popped in for a coffee, between meetings, spending £3.90 for a takeaway flat white.
The view from Primrose Bakery overlooking the modern Gail’s
‘Isn’t that pricey?’ I ask.
‘Anything under £4 is acceptable, in my view,’ he explains. While £3.90 may sound a lot, it’s the same price as Pret a Manger and Caffe Nero.
Just like Waitrose, its reputation for fancy pastries and even fancier customers means that it has spawned the so-called ‘Gail’s effect’. Namely, if one opens in your area, the house prices will go up.
This theory is backed up by Brandling-Harris, who owns the House Collective estate agency, and who has lived in Primrose Hill for 15 years.
‘Gail’s is good for the area, it’s a community hub. It is really consistent – good sandwiches, good coffee. And, importantly, it has filled a void. This was an empty site before.’
This outlet occupies a site left vacant when an independent delicatessen called Melrose & Morgan was forced to close, after falling into administration last year, before resurfacing as an online-only shop.
Many locals, however, would have much preferred another independent, rather than a fast-expanding chain. This includes the Left-wing, Brexit-loathing barrister Jolyon Maugham, who decries it as, ‘McDonald’s for those with more money than taste.’
Another Primrose Hill critic, Cuitlahuac Turrent, who works for an investment bank, tells me: ‘It could destroy local neighbourhood bakeries with its bland, soulless food and atmosphere.’
Cuitlahuac Turrent feels Gail’s could destroy local bakeries ‘with its bland, soulless food and atmosphere’
Turrent, who moved to Primrose Hill with his partner, Chris, last year from New York says: ‘Everyone in the Primrose Hill community has been really welcoming to us – mainly through all these local shops, the cafes, the nail salon, the dry cleaners. That’s where we have met people. Gail’s is just not in that spirit.’ He adds bluntly: ‘Gail’s is the worst.’
I meet him across from Gail’s with his dog, a cavapoo called Panchito, in a rival cafe called Jolie Corner.
Next door to Jolie Corner is the Primrose Bakery, opened by Martha Swift nearly 20 years ago. ‘There are just so many Gail’s,’ she says in exasperation. ‘There are five others within walking distance.’
This branch is less than 500 yards from one in Camden Lock and the same distance from one in Camden Town; three others are less than a mile away.
Swift specialises in bespoke wedding and birthday cakes, ‘so we do different things’, but she also makes quite a bit of her money from people popping in for £3.40 coffee and a £3.50 cupcake. But she has noticed lots of customers come into her shop clutching a Gail’s coffee cup.
‘It is really tough to run an independent business on the high street at the moment – the cost of ingredients has gone through the roof, it’s a nightmare. Then there’s the price of electricity, plus the cost of business rates. You just can’t pass on these costs to customers.’
She adds: ‘A chain like Gail’s can afford to lose money, whereas if you are an independent business you have to make a living.’
This is the crux of many people’s objections to Gail’s. For years, with its intimate name and handbaked goods, the bakery has almost masqueraded as an independent – but is in fact owned by a consortium of US and British private equity companies and can afford to lose money, while it expands rapidly. Though its tills are ringing, it still made a pre-tax loss last year of £7.4 million.
Jonathan Brandling-Harris popped into Gail’s for a takeaway coffee, spending £3.90 on a flat white
Others blame Gail’s for the gentrification of areas, claiming that its arrival heralds small, local shops and services being priced out.
This concern was so acute that when Gail’s moved into Walthamstow last year, a petition garnered 1,800 signatures. ‘It’s about choosing inclusive growth, preserving diversity and creating equitable and sustainable local economies,’ the petition claimed.
In Bath, where Gail’s is planning to open, it has been met with a new backlash for the same reason.
Another problem in the eyes of many boycotters, is that one of its directors and co-owners is Luke Johnson, entrepreneur and prominent supporter of Brexit, who critics have decnounced as peddling ‘climate denialism, woke-hating, anti-lockdown’ views.
In a world where consumers increasingly want to spend their money in a business that aligns with their politics, Gail’s just isn’t woke enough for some.
Even worse, in the eyes of some detractors, is the false belief that it is an Israeli company, and therefore ‘buying pasties at Gail’s helps them to continue their support of the genocide’ in Gaza – as one protestor claimed on the social media site X. This is nonsense.
The company felt so alarmed at the growing backlash, particularly on TikTok, that chief executive Tom Molnar felt compelled last year to say: ‘Gail’s proudly has Jewish roots and there’s plenty of stuff out there celebrating our heritage and history, but it’s not true it’s Israel-owned.’
Gail’s was founded by an Israeli baker, Gail Mejia, in the 1990s, as a wholesale bakery in Hendon, supplying London’s restaurants. Back then it was called the Bread Factory. It still makes over a third of its turnover from supplying large-scale customers such as five-star hotels and even the royal household – Gail’s has a warrant from King Charles.
At the time, Molnar, an American who grew up in Florida and still sometimes skateboards to work, was a management consultant working for McKinsey in London. He’d tried the bread, liked it, but decided the company’s management was ruining a potentially great business. He admits he had little interest, initially, in bread or croissants – ‘I was looking for something to do that was interesting,’ he has said.
‘When I met Gail, she was gonna lose her house and her car, a whole bunch of stuff was just falling apart,’ he recounted in a podcast earlier this year. ‘And the guy who was running it was getting drunk at lunch and punching the bakers. And we were like: “This can’t go on.” ’
He and a fellow McKinsey management consultant, Ran Avidan, an Israeli, took over the company – with Gail – and set about restructuring it, going on to open its first cafe in Hampstead in 2005, named after its female founder.
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Mejia herself quit the business and sold her stake when Luke Johnson arrived as an investor in 2011. For many years Johnson was chairman, helping it to expand rapidly and raise yet more money. Its main backers now are the vast venture capital funds Bain Capital, alongside McWin Capital Partners, which owns a franchise for Burger King in Germany, a stake in fried chicken chain Popeyes and runs 370 Subway sandwich shops in France and the Czech Republic.
Molnar, now 58, and the senior management team own a 25 per cent stake in the company, which could be worth an eye-watering £125 million. That’s because at the end of last year Wall Street bank Goldman Sachs was brought in to potentially sell the business for a reported £500 million.
Molnar won’t comment on these rumours, but he told the Daily Mail that it was mistaken to blame his chain for gentrification.
‘We open bakeries when we feel we have something to contribute to the neighbourhood, but the reality is that we’ll be one of 20, 30, 40 businesses in that place, so we’re only a small part of the picture.’
He also insisted that ‘we tend to take over unused businesses and sympathetically transform them into spaces which reflect the heritage and architecture of that place’.
That isn’t always the case. Gail’s upset many locals when it opened a branch in Lewes, last year, taking over a former NatWest branch, a handsome Grade II-listed Georgian building, replacing the old oak door for modern glass ones. When the South Downs National Park demanded the company reinstate the original, Gail’s applied for retrospective planning permission, which was refused.
To its critics, this episode exemplified why Gail’s rubs some up the wrong way. It purports to be a champion of communities – Molnar proudly talks about giving away over one million items of food to local charities in the last year – but too often it seems more interested in expanding quickly and asking for forgiveness later rather than seeking permission first.
To its fans, however, all the complaints derive from either snobbism, anti-Israeli sentiment or an inability to appreciate a really good, if pricey, £6.80 smoked salmon bagel. ‘We love it because everything is extremely fresh. My favourite salad is the lentil, beetroot and feta one – it’s delicious,’ says Shirit Kedar, 53, an Israeli filmmaker and long-time resident of Primrose Hill. ‘The people who boycott it are talking rubbish.’
She is the final customer that I speak to – lunching with a neighbour – and I point out that many locals say they are upset that Gail’s has replaced Melrose & Morgan. ‘They were much more expensive than Gail’s. We used to call them Melrose & Mortgage,’ she laughs. ‘Look, Gail’s is good for the high street. They are reliable, they employ people, they are tasty.’
And in a high street where many struggle, perhaps Gail’s greatest crime is that it is successful.