Greggs is proposing a major consolidation of its manufacturing network that could result in around 740 redundancies over the next two and a half years, reshaping production while the bakery chain continues to expand its shop estate.
The proposed changes would close four manufacturing sites and reduce production at another facility. Greggs expects the programme to cost about £60m in cash, including roughly £40m of capital expenditure, while generating approximately £20m of annual pre-tax operating savings once fully implemented during 2028 and 2029.
The affected manufacturing sites include operations in Enfield, North Lakes, Kelso and Seaham. Distribution functions are expected to remain at some locations, while elements of production would be transferred to larger facilities or sourced through specialist suppliers.
Consultation has begun with employees and trade unions, meaning the final number of redundancies and precise structure remain subject to that process. Retail shops are not included in the proposed closures.
The restructuring accompanies stronger third-quarter trading. Total sales increased by 7.7% during the 13 weeks to 26 September, while like-for-like sales at company-managed shops rose by 3.4%. Greggs said recent performance and continued cost control meant the outcome for 2026 was now expected to be modestly better than previously anticipated.
Expansion of the shop network has continued alongside the infrastructure review. Greggs had added 95 new locations during the year and closed 38 by the end of the third quarter, producing 57 net openings and taking the estate to 2,796 shops.
A larger national estate places different demands on the production and distribution network that supports it. Manufacturing capacity, transport, labour and inventory need to scale without allowing operating costs to rise at the same pace as shop numbers.
The proposed consolidation reflects that growth challenge as well as inflationary pressure. Greggs expects like-for-like cost inflation of about 2% during 2026 but has indicated that pressure is likely to increase in 2027, including through higher energy costs.
Food-to-go operators have had to absorb several years of volatility across ingredients, wages, utilities, property and transport. Scale provides purchasing and distribution advantages, but a large estate also carries substantial fixed costs and requires continuing investment in production and logistics.
Greggs has been investing in supply-chain infrastructure to support a longer-term ambition of around 3,500 shops. Manufacturing efficiency becomes more important as that estate expands: new openings need supporting capacity without eroding the economics of the growth they are intended to create.
The workforce impact remains substantial. Around 740 roles would represent a significant restructuring even when spread across several locations and more than two years. Consultation will determine how many positions are ultimately removed and whether redeployment or changes to the plans reduce the final number.
The programme also illustrates that restructuring is not confined to businesses experiencing falling demand. Greggs is increasing sales, continuing to open shops and improving its near-term profit expectations. The proposed changes are designed to alter the cost base supporting further expansion.
Similar choices are appearing across consumer-facing industries as companies simplify back-office functions, consolidate warehouses, automate production and renegotiate supplier arrangements while labour and energy costs remain structurally higher than before the pandemic.
Greggs’ trading performance gives the company greater capacity to fund the programme, but the anticipated £60m cash requirement means savings will follow a significant period of upfront investment.
The consultation will proceed alongside continued estate growth and preparations for greater cost inflation in 2027. The economics of Greggs’ next phase of expansion will increasingly depend on whether its manufacturing and logistics network can scale as efficiently as its retail footprint.
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