Greggs confirms bakery closures and rising sales

By Michael Stones contact

- Last updated on GMT

Greggs has confirmed the closure of three bakeries and investment in its supply chain
Greggs has confirmed the closure of three bakeries and investment in its supply chain

Related tags: Supply chain, Management, Baker greggs

High street baker Greggs has confirmed plans to close three bakeries, while posting total sales up by 5.7% for the 18 weeks to May 7.

The bakery closures – announced in March as part of a proposed £100M investment plan in manufacturing and distribution operations – will affect Sleaford, Twickenham and Edinburgh.

After ending a formal collective consultation, Greggs confirmed: “The smallest site at Sleaford is now being closed and we expect to close our Twickenham bakery in the fourth quarter of 2016 followed by Edinburgh in the second quarter of 2017.”

Greggs praised the commitment and professionalism of staff affected by the closures. It pledged to “work with them individually to ensure that we manage these changes in line with Greggs’s values as a responsible employer”.​ 

The bakery business said it would continue to develop plans to invest in its remaining supply chain network over the next five years in order to “create centres of excellence serving our growing shop estate”.

Up to 355 jobs would be lost

The bakery closures were originally announced​ on March 2, alongside the firm’s preliminary results. Up to 355 jobs would be lost due to the closures, it was reported at the time.

Meanwhile, the business today (May 9) posted total sales up by 5.7% for the 18 weeks to May 7, after “making a good start” ​to the year despite rising wage costs.

Like-for-like sales in company-managed shops grew by 3.7%, reflecting what the firm described as “softer”​ conditions on the high street in March before recovering in recent weeks. These conditions were reflected in its own performance.

The business has opened 43 new shops, including 23 franchised units in transport locations, so far this year. Also 21 shops had been closed, giving a total of 1,720 shops trading on May 7. That included: 1,592 company-managed shops and 128 franchised stores.  

An improved range of products was said to be continuing to drive sales. The hot sandwich range and extended breakfast menu were proving particularly popular, it was claimed.

Proving particularly popular

The introduction of flat white coffee was helping to continue delivery of double-digit growth in sales of hot drinks.

The fresh fruit offer had been extended and sales of an upgraded range of salads, which are freshly prepared in store and now available nationwide, had proved encouraging.

Greggs concluded: “We have made a good start to the year. Input cost inflation remains low despite increased wage costs and, with a strong pipeline of product initiatives and plans to invest in our shops and supply chain …”

Financial performance for the remainder of the year was expected to be in line with previous expectations.

Greggs’s annual general meeting takes place tomorrow (Tuesday May 10). The business operates more than 1,700 stores nationwide.

Greggs results – at a glance

• Total sales up 5.7% in first 18 weeks of 2016 (2015: 5.9%)

• Company-managed shop like-for-like sales in the first 18 weeks up 3.7%

• 55 shop refits completed

•  43 new shops opened, 21 closures

• Breakfast, hot sandwiches and ‘Balanced Choice’ options driving growth

• Consultation on supply chain investments

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