Correlation or coincidence: does the arrival of a Gail’s deliver an extra slice for home owners?

Step foot in a Gails bakery, and your senses will be assaulted by the aromas of freshly baked goods, artisanal coffee, and the murmur of the chattering classes.

For many Gails consumers their morning coffee is more than just a delicious drink, its a status symbol that tells the world their neighbourhood has ‘made it’.

Gails is a phenomenon, and the artisan bakery has been marked as a symbol of wealth, subsequently deeming the areas they are situated in as upper middle class. 

But are their locations correlation or coincidence, do Gails affect house prices and act as a marker of gentrification, or is it a driving force for gentrification?

Toby Anderson, Senior Executive at Knight Frank, one of London’s leading independent real estate consultancies, does not think this is a coincidence. 

He told ELL: “Shops like Gails will probably gentrify or improve the attractiveness and convenience of an area in the longer term. Therefore, one could assume that over time, the introduction of these types of shops attracts more people to an area and therefore, it is likely demand for the area increases and thus property price will grow in conjunction with this.”

No matter the house prices of a borough Gails effects businesses and residents, certainly boosting the value of properties on their local high streets.

It origins were in 1993 when Yael (Gail) Mejia set up a wholesaler, The Bread Factory, in 1993, providing hand-made artisanal bread to London’s best restaurants. Mejia then partnered with Tom Molnar to set up the artisanal bakery and manage both companies.  The first ever Gails bakery hit Hampstead High Street in 2005, and since then, Gails has opened 75 branches across London. 

In the Eastlondonlines boroughs there are three Gails: Hackney, Tower Hamlets, and Lewisham are all home to a store each. 

The original Gails bakery opened in Camden, a borough where house prices were already above the national average. Gails opened six more branches within five years.

As demonstrated by the map below, by 2010, two of the new Gails stores were opened in boroughs where the house prices were below the national average. Those stores were Gails Queens Park and Gails Chiswick.

Five years later, houses near the Queen’s Park branch in the borough of Brent surpassed the UK house price national average.

By 2020, Gails had 45 bakeries in London, 42 of which were situated in areas where house prices were above the UK national average, as demonstrated by the map below. 

Out of the remaining three bakeries where the shops were located in boroughs where house prices were below the UK national average, two of those shops have seen no change in their borough’s house price ranking. 

Those two shops are situated in the ELL boroughs, Gails Blackheath in Lewisham, and Gails Spitalfields in Tower Hamlets. 

These two ELL locations cut against grain, even though the boroughs the Gails are located in are below the national average for house prices, on a localised level house prices within the immediate vicinity of the bakeries are above average. 

It seems that Gails is drawn to affluent areas, acting as a marker rather than a contributing factor to high house prices. Max White, Director of Winkworth, one of London’s leading estate agents, believes this is the case.

He told ELL: “We know that Gails and other similar brands will only open in already affluent areas where the local populace have proven spending power.”

However, he did suggest that Gails bakeries increase the value of already wealthy areas, adding: “without doubt the influx of retailers and brands in the luxury category help to increase property prices in the area as it marks them affluent areas helping to continue to drive demand and therefore prices.”

In 2021, Bread Holdings Limited received investment from Bain Capital and EBITDA Investments to “support the craft bakery as it moves into the next growth phase.”

This recent expansion led to another 28 shops opening, suggesting the humble artisanal bakery has developed into a franchise; this can be understood by the map below.

Nevertheless, Gails will solely refer to itself as a brand, never a franchise. In having a cohesive identity, the store can disguise itself as a comforting, independent-style bakery.

This is apparent in the way CEO Tom Molnar described the store’s plans for further expansion saying: “We believe that craft baking and craft principles are currently underrepresented in today’s food landscape and that society is better when we eat better.” 

Molnar focuses on the roots of the business as an artisanal bakery to underplay the commercial expansion of the store. 

However, as demonstrated on the map above, which shows all the Gails stores in London in 2023, this is not the case.

The numerous amounts of Gails open in boroughs where the house prices are above the UK national average marks the brand as, at the very least, an indicator that an area is well-to-do.

The introduction of Gails has also led to a rise in the number of artisanal-style bakeries in London. 

In Victoria Park, an area in Hackney where house prices are well above the national average the Gails bakery, which opened in 2016 is surrounded by similar independent competitors. 

Susie McDuell, owner and creator of Loafing, an artisanal bakery in Victoria Park explained the affect the Gails store has had on Loafing’s rent.

She told ELL: “The shop’s rent has always been very reasonable, I have been in Victoria Park for 20 years, but when I had to renew my lease, they tried to double the rent and justified it by saying that bakeries like Gails can afford commercial units at that price.”

McDuall added that Gails has negatively affected her business: “We have been massively affected by Gails, we cannot compete with them because when a person sees a Gails store they feel safe and choose to go there.”

She also explained that her partner, Christophe Le Tynevez, owns a small cluster of bakeries called Boulangerie Jade and that every time he opens a store, a Gails coincidently appears close by: “He got the keys to a new shop in East Sheen, but the next day found out a Gails was going to open there, subsequently he had to close the store, independents are being pushed out.”

Gails have declined to comment on the decision process around where they open stores. 

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