Greggs has announced plans to close four of its factories, in a move that could result in ۷۴۰ job losses over the next two and a half years.
The bakery chain said it was consulting on the closures, which would initially cost £۶۰m when including disruption costs and redundancy payments but then could create £۲۰m of savings each year by ۲۰۲۸.
The proposed cuts come as Greggs reported stronger sales growth in its most recent quarter at ۷.۷%, up from ۷.۲% in the first half of the year. The company said the closures, “while difficult, are necessary” to ensure it can grow in the “most cost-efficient manner”.
It said: “Our immediate priority is to minimise the impact on our people where possible. We will enter into a consultation period shortly to work with trade unions and employee representatives of those affected to refine and develop these proposals.”
The closures could affect factories in Enfield, north London, Penrith in Cumbria, Kelso in Roxburghshire, Scotland, and Seaham in County Durham. It will continue to run distribution operations from Enfield. The proposals could also affect manufacturing operations at its Treforest site in Wales, but this will continue as a distribution centre for business.
Greggs has grown to become Britain’s biggest fast-food business thanks to the popularity of its low-cost pastries, cakes and hot drinks. It has expanded rapidly this year, with ۵۷ net new openings, as part of its plan to open between ۱۰۰ and ۱۱۰ shops by the end of ۲۰۲۶.
Iced matcha lattes and a bigger range of salads and chicken rolls also helped to boost sales over the summer, the company said. However, Greggs told investors on Wednesday that while stronger sales had “modestly improved” its outlook for this year, “there are signs of greater inflationary pressures in ۲۰۲۷”.
Alex Pugh, an analyst at the investment broker Freetrade, said that while the bakery chain “has survived a heatwave and a cost of living crisis … a £۱.۵۰ sausage roll could be a real test of loyalty”.
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Earlier this year the company raised the cost of its bestseller sausage roll by ۵p, taking it to £۱.۳۵ in most shops. It also increased the price of a latte by ۱۰p, taking it to £۲.۲۵, as it looked for ways to combat rising wage, energy and packaging costs.
Shares in Greggs rose by ۷.۳% in early trading on Wednesday morning, making it the best performer across the mid-cap FTSE ۲۵۰ index and taking its year-to-date rise to ۱۷%. Greggs, which is headquartered in Newcastle, employs more than ۳۳,۰۰۰ people around the UK.
