Controversial bakery chain Gail’s uses form of AI to make major business decision
A popular high street bakery and coffee shop chain has admitted to using an AI-style algorithm to choose where it will open new UK stores.
Gail’s co-founder, Tom Molnar, said the brand created its own computer algorithm to decide where is best to open new stores. Sharing the insight on a recent episode of the Hungry Podcast, Molnar said the algorithm was a “less-advanced” form of AI and helped them find the most appropriate areas for new bakery branches.
He said: “So those algorithms, we built it, I mean, it’s probably been eight years we’ve been building. It’s like, why would somebody want a bakery in every neighbourhood?And basically we ended up with an algorithm that can tell you every postcode in the country, what we might be able to do there, based on what we’ve done.”
Molnar noted that it wanted to open Gail branches in places that were “competitive” and they used the algorithm to look at footfall, access to transport, spending capabilities, and demographics of different areas of the UK. The chain then puts this information into the algorithm model for each potential new site.
He added: “AI is more advanced, but it’s the same kind of thinking where you can just keep on feeding a model and the model can tell you, hey you might look at this area, I think that this might work. And then at least gets us that beginning and we can say, let’s use the science, now we need to use our brain, that’s 50% of the answer.”
On the podcast, Molnar said that the chain still needs to “head into” the neighbourhoods where it is considering opening new sites. He says the chain likes to ask questions, noting that overall it was a “creative process” adding: “It’s like, why would somebody be there? Well, maybe it’s a little bit about schools, right? How many schools are around there? How many churches are around there? How far are you from the tube?
“But what I find is that Gail’s can exist because there’s lots of people around, near a tube, you know wealthy right? And then one can do really well because it’s you know, it’s basically in a community that don;t have much, and you know they have to drive somewhere else and there’s not much footfall.”
Gail’s, which is beloved by Britain’s middle classes, has 130 coffee shop and bakery branches in the UK – with many of them being in the capital. It started off as an independent store in Hampstead, London, in 2005, and it plans on opening 40 more new stores over the next year. However, Gail’s store openings have become renowned as being the centre of the gentrification row in towns and villages across the country.
In August, hundreds of residents in Walthamstow in London signed a petition against the chain from opening a new store on the high street. Residents were concerned that the chain could impact local, independent businesses and force them to shut down. Gail’s did open the controversial store in October, and recently one bakery owner close to the Walthamstow branch told MyLondon that she would potentially have to sell her business after the “worst December in 19 years”. Another new store is planned for Stoke Newington which has received backlash from local residents.
The co-founder said that architecture and property drove a lot of the decisions early on, and it didn’t matter about the neighbourhood. He said: “As we get bigger we think okay, we know it’s a neighbourhood, and we find a nice building there. And we always like the challenge.
“It’s kind of half math and half art. Because, I mean, you can do some, we’ve got algorithms that I kind of, I’ve built with some guys, which is a creative process. So I mean I want to put science into it, right? Because I want to free my mind in the space to really think about the place.”
A spokesperson for Gail’s told MailOnline: “We understand the concern around chains, but our view is that a healthy high street is one with a diversity of quality offers each delivering their best. High streets evolve over time, and we open our bakeries often in closed banks or restaurants, improving the landscape of the high street.
“All of our bakeries exist in areas where the choices are wide and growing – we believe the improvement in our food landscapes is something to celebrate.”
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