Greggs puts 740 jobs at risk as baker braces for worse inflation
Greggs has announced a shakeup of its manufacturing processes which could lead to the closure of four factories and cost 740 jobs, as the baker warns of “greater inflationary pressures” across its business.
The sausage roll seller told shareholders on Wednesday that it is consulting on a move to consolidate its manufacturing operations, which would initially cost £60m but save the firm £20m each year.
The bakery chain said improved sales have “modestly improved” its outlook for this year, though it warned that “there are signs of greater inflationary pressures” to come in 2027.
The group said the potential redundancies are the result of a “comprehensive” review into how it can best streamline its production to support its ambition of reaching 3,500 bakeries in the UK.
“We believe such changes, whilst difficult, are necessary to ensure Greggs continues to meet capacity requirements for growth in the years ahead in the most cost-efficient manner,” Greggs told shareholders.
“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.”
Greggs is proposing to close its factories in Enfield, North Lakes, Pettigrews and Seaham. Enfield will continue to operate as a distribution centre and Treforest, in Wales, is set to convert from a manufacturing centre to a distribution site.
Roisin Currie, the group’s chief executive, told reporters on Wednesday: “These changes, while they are difficult and it’s tough out in our sites today, they are necessary to ensure Greggs continues to meet capacity requirements for growth in the years ahead in the most efficient manner.”
A consultation on the proposed closures will begin next week and last until the end of November. Greggs’s priority is “being with our people and trying to make sure that we enable them to challenge this set of proposals,” Currie said.
Greggs faces ‘challenging conditions’
Greggs’s sales were up by 7.7 per cent in the last three months, marking an acceleration from 7.2 per cent growth in the first half of this year. Like-for-like sales at the firm’s managed shops also accelerated from 2.1 to 3.4 per cent.
The group said cost inflation is set to come in at two per cent for 2026, as expected, though the firm warned that inflationary pressures will worsen next year.
Currie said: “If you look at how some of the energy costs [from the Iran war] will flow through to ingredients that we expect next year, then we’re expecting to enter a higher inflationary environment.
“In saying that, we don’t think it will go back to some of the peaks that we saw as we entered the Ukraine conflict a few years ago. But we think it will be higher than this year.”
The bakery chain has opened 57 new shops in the year to date, on a net basis, with plans to have opened between 100 and 110 by the end of 2026.
Shares in Greggs jumped 7.5 per cent in early trading to 2,016p, leaving the stock up more than 20 per cent in the year to date.
Analysts at Panmure Liberum, which upgraded its rating on the company from ‘hold’ to ‘buy’, said the savings from factory closures would “meaningfully support” higher-than-expected profit. “The company [is] rapidly pivoting from an earnings downgrade cycle to an upgrade cycle,” they said.