Greggs to Cut Over 700 Factory Jobs Amid Rising Costs
The bakery chain plans to close four manufacturing sites to reduce expenses, despite a recent increase in sales.
Greggs is planning to eliminate more than 700 manufacturing jobs as part of a restructuring effort aimed at managing rising costs and maintaining product value. The company announced its intention to consult on the closure of four of its 14 manufacturing and logistics sites over the next two and a half years, a move that will affect approximately 740 employees.
This overhaul is intended to streamline Greggs' production and distribution processes, which are currently managed directly from its manufacturing facilities to its nearly 2,800 stores. The company stated that these changes are necessary to ensure future growth can be met with efficient and cost-effective operations, despite the immediate difficulty of job losses.
The proposed closures are expected to incur a one-time cost of £60 million but are projected to yield annual savings of £20 million.
Greggs indicated that it anticipates "greater inflationary pressures in 2027" and described the current market conditions as "challenging." However, the company reported that sales have shown resilience. Like-for-like sales at company-managed shops increased by 3.4% in the third quarter, an improvement from the 2.1% growth seen in the first half of the year. This performance was supported by new product launches, including Matcha drinks and a Steak and Stilton bake, as well as favorable weather in August and September.
As a result of these sales trends, Greggs now expects a "modestly improved outcome for 2026," with underlying pre-tax profits anticipated to be similar to last year's £172 million.
The company has continued its expansion strategy, opening 57 net new shops this year and aiming for a total of 100 to 110 new locations by year's end, alongside 12 "Greggs Express" self-service stores. However, the financial impact of the manufacturing restructuring and ongoing work at new national distribution centers in Derby and Kettering is expected to affect profits.
Analysts noted that Greggs' diversification into healthier options like matcha and protein-based items reflects a response to evolving customer preferences. However, the prospect of higher costs and inflation in 2027 could pose a challenge, potentially testing consumer loyalty to its core offerings.