Greggs hunts new site to feed south with savouries

UK takeaway retailer and baker Greggs is looking at possible sites for a new multi-million pound bakery to make savoury products for its outlets across the south of England.

Greggs' second central savoury production unit, which is likely to amount to a £20-30m investment over three years, will complement its Balliol Bakery at Newcastle upon Tyne.

Sites under consideration include some in the east and west Midlands. Another option would be to extend the existing Balliol facility, although this is thought less likely in view of the need to supply growing demand for bake-off sausage rolls, pies and pasties in the south.

A decision will not be made until the end of the year at the earliest, but the company said it would hope to have the new plant ready within three years. "Our future strategy is for continued expansion and the new production facility will be in addition to our current production base with the specific aim of meeting growing demand for our quality products," said the company, which employs around 17,900 people and operates more than 1,200 stores, focusing on takeaway food and catering. It also has a number of bakeries. While sandwiches are freshly made at its high-street retail outlets, savoury items are all made in Newcastle.

Greggs has seen strong growth recently. Earlier this year it announced record pre-tax profits of £40.5m on a turnover of £457m, up 10.4% year-on-year.

Last year it spent £32.4m, mainly on new shops, refurbishments, land acquisition and plant.

It redeveloped its Enfield bakery, increasing capacity by 50%, and extended its Birmingham bakery as well as beginning expansion in Leeds.

This year it plans to spend a further £34m, completing work at Leeds and extending its Edinburgh facility. It also plans to open new shops.