Greggs has unveiled plans for a major overhaul of its manufacturing operations, a move that could result in the closure of four factories and the loss of 740 jobs. The bakery chain has also warned of "greater inflationary pressures" across its business.
The high street favourite told shareholders on Wednesday that it is considering consolidating its manufacturing operations. This would initially cost £60m but is expected to save the company £20m annually.
Despite reporting improved sales that have "modestly improved" its outlook for this year, Greggs cautioned that "there are signs of greater inflationary pressures" looming in 2027.
Consultation with trade unions
The potential job losses are the outcome of a "comprehensive" review aimed at streamlining production to support the company's goal of operating 3,500 bakeries across the UK.
In a statement to shareholders, Greggs said: "We believe such changes, while difficult, are necessary to ensure Greggs continues to meet capacity requirements for growth in the years ahead in the most cost-efficient manner."
"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."
Sales growth and new products
Sales at Greggs rose by 7.7% in the last three months, up from the 7.2% growth seen in the first half of this year. Like-for-like sales in the company's managed shops also saw a boost, rising from 2.1% to 3.4%.
The bakery has credited its new menu items, including Matcha lattes and salads, for boosting sales over the summer. The food retailer recently launched a new steak and stilton bake, which it reports has enjoyed "highly successful" trading.
The company anticipates a two per cent increase in costs due to "challenging market conditions".
Greggs's strategy to manage cost inflation "has supported performance in 2026, though there are signs of greater inflationary pressures in 2027," the firm revealed.
"Our proposals to reshape our manufacturing footprint reflect the evolution of the business and our focus on remaining the customer's number one choice for value in the market."
Expansion continues
So far this year, the bakery chain has opened 57 new shops, net, with ambitions to have opened between 100 and 110 by the end of 2026.
In the past three months, the company has opened its fifth smaller-format 'bitesize Greggs' at a Tesco superstore in Southwark, London, as well as its 50th drive-through site, located in Sunderland.
