For those who haven’t heard of Gail’s, it is a chain of artisanal coffee shops, loved by those who enjoy splurging £4.30 on an iced latte and despised by others who claim the sourdough-lined shop is actually a corporate enterprise ruining the high street.
But whether you’re a lover or a hater, the one thing everyone is desperate to debate is the ‘Gail’s theory’ – a longstanding idea that Gail’s bakeries boost house prices.
can reveal that house prices in neighbourhoods blessed by the red and white awnings and exposed brick aesthetic of a Gail’s bakery are not actually rising any faster.
Our analysis using Government figures looked at house prices in the immediate vicinity of each established Gail’s store.
It compares the prices of homes sold in the quarter ending September 2024 to the same period the previous year. ran its audit for every MSOA – a geographical area home to around 1,500 people – in authorities where Gail’s operates.
It found that the presence of a Gail’s bakery doesn’t seem to have any meaningful effect on house prices.
Before the bakery established itself as a middle-class phenomenon, it was originally a wholesaler called The Bread Factory founded by Gail Mejia in 1993.
Ms Mejia along with a handful of London’s ‘best bakers’ supplied artisanal bread and cakes to restaurants and hotels, baking communally from a site in Hendon, north London.
It was 2003 when two businessmen working at one of the world’s biggest consultancy firms – McKinsey – had the foresight to capitalise on sourdough.
Tom Molnar and Ran Avidan bought half the company and two years later opened the cafe’s first branch in Hampstead.
The small shop nestled on the corner of a leafy street attracted customers willing to pay slightly more for high-quality homemade food from a seemingly independent bakery.
The original shop was in the borough of Camden, which has 27 MSOAs or neighbourhoods.
Of Camden’s MSOAs, 10 are now home to a Gail’s, including some with more than one.
But house prices in Camden have fallen by 6.3 per cent, on average.
For five of those MSOAs possessing a Gail’s, ‘s analysis shows prices plunged even more than that. One particular district saw a decline exceeding 20 per cent.
Prices fell in two other neighbourhoods but by less than Camden’s average as a whole.
For the other three, house prices actually shot up.
In Kensington and Chelsea out of the seven neighbourhoods, five saw a positive correlation between house prices and the appearance of a Gail’s.
A similar trend occurred in Richmond upon Thames, Islington and Buckinghamshire.
The most significant example of the ‘Gail’s effect’ can be found in central Billericay where house prices shot up by 12 per cent in the year to September 2024, after the bakery opened in 2022.
But Gail’s mainly appears to have no market affect on house prices elsewhere in the country, dealing a killer blow to residents hoping that Gail’s’ arrival will add tens of thousands of pounds onto their homes.
Sonny Dawes, Head of Asset Repositioning and London Land at JLL told , ‘Anecdotally, Gail’s clearly targets locations where there’s a certain demographic or emerging demographic.
‘By them going to that area it almost further catalyses the effect, encouraging more people to the area.
‘It’s not all of Gail’s creation though, but they can definitely contribute significantly to gentrification of an area.
‘In my own town, a Gail’s opened up in the past six months and it was a big deal for locals. One small bakery or cafe doesn’t change a neighbourhood, but it’s a vote of confidence in the location from Gail’s, which boosts consumer appeal and confidence in an area too.
‘I think people associate Gail’s with locations that have a certain amount of amenity and certain demographic. If people relate with that, it draws them in.’
In the following years after Gail’s first opened, a few branches popped up around London, nestling themselves on higher-end high streets close to suburban areas of the City.
The bakery began to expand rapidly in 2012, when Risk Capital Partners, co-founded by the former chairman of Pizza Express bought a ‘large stake’ in Bread Holdings Limited – the holding company for both Gail’s and The Bread Factory.
Subsequently, the store began to garner a fanbase of coffee lovers willing to splurge on oat milk cappuccinos and £3.45 pain au chocolats.
At this point, the store was relatively uncontroversial, noticed by foodies and overlooked by the rest of the population.
But in 2021, EBITDA Investments and Bain Capital invested over £200million in Bread Holdings Limited, handing over control of the bakery’s expansion plans.
From there, the bakery exploded becoming prominent in Manchester, Surrey and appearing on every street corner in London.
This mass expansion has led to the bakery becoming a hot topic especially among those looking to buy a house.
Mr Dawes added that buyers ‘almost certainly’ find an area more appealing if it has a Gail’s.
‘The presence of a Gail’s would not turn someone off from living there,’ he said.
The bakery definitely capitalise on property opportunities – regularly repurposing existing buildings such as banks and old restaurants.
As a result, they tend to be found at the centre of gentrification rows.
Most recently, the bakery attracted backlash from residents in Walthamstow, north-east London.
Hundreds of locals signed a petition to stop the company opening on their High Street amid fears it could run independent cafes out of business.
The petitioners said they wanted to protect ‘the unique identity of our community’ by ‘safeguarding the soul of a beloved neighbourhood’.
At the time, Fanie, 30, told : ‘In one week we got a Banksy and a Gail’s, it’s not a good sign. It’s not great. I am part of the problem (of gentrification), moving into Walthamstow.
‘But I want it to stop with me. I want it stay nice and cool while I live here. It’s not great for business, it’s not great for diversity, it’s not great for coolness factor.’
Jane Leeker, 54, added: ‘I am definitely against it. We’ve got lots of independent coffee shops already in the village and around, and I wouldn’t want to see the profits go to, essentially, a chain.
‘I’d prefer that that money stays with our independents, and I think they’ll take their business away. I like Gail’s personally, and if they were going into Walthamstow itself where there’s lots of chains, lots of empty spaces, I’d be much more supportive of that.
‘I can see that there is a certain hypocrisy, I get that.
‘But I don’t know, maybe it is the ultimate sign of gentrification. But that doesn’t change my view. I think generally we should support traders and family businesses.’
But the store went ahead and opened in October.
And it seems Gail’s is going nowhere as Goldman Sachs are set to run an auction of the chain next year – which will likely lead to further expansion.
According to speculation from analysts, the company could now be worth as much as £500million.
Despite the company having such a high value and popping up in areas on the cusp of gentrification, the borough has no affect on house prices.
So next time you’re looking to buy a property maybe don’t make Gail’s a requirement.
Gail’s declined to comment.