Greggs' shake-up to concentrate on lunchtime takeaway trade
High street chain Greggs is to close three of its bakeries with a loss of 355 jobs, as it transforms its business into a '˜food-on-the-go' operation.
The Newcastle-based group said the closures in Edinburgh, London and Sleaford in Lincolnshire are part of a £100m. investment to upgrade its bakeries over the next five years, moving away from “daily bread and cakes” to concentrate mainly on customers buying lunchtime sandwiches.
However it plans to expand its Clydesmill bakery in Glasgow where it will create a “centre of excellence” in Scotland.
The group, which currently runs 12 bakeries and just under 1,700 shops, said the posts will be axed as a result of the reorganisation.
It said: “Wherever possible we would look to offer alternative employment to affected employees but, due to the location of our sites, we anticipate that unfortunately many will leave the business.” The announcement on job losses came as Greggs reported a 47 per cent increase in annual pre-tax profits to £73m, up from £49.7m in 2014, on a 5.2 per cent increase in annual sales to £835.7m.
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The group said further improvement to its sandwich range and the addition of free-range egg omelettes to its breakfast menu helped profits jump.
In terms of wages Greggs also said it would increase the pay of its shop floor workers by 5 per cent to £7.47 an hour to maintain “a premium over the statutory minimum”.
Chief executive Roger Whiteside, chief executive, said: “In 2015 we delivered another excellent performance in the second year of our strategy to transform Greggs from a traditional bakery business into a modern, attractive food-on-the-go retailer.”
It added that as part of its bakery reorganisation the Clydesmill bakery in Glasgow and a newly acquired site in Enfield in London will become “manufacturing centre of excellence”, as the business develops more diversified food ranges.
Analysts at Shore Capital said Greggs had enjoyed “a very strong year, characterised by a sustained period of upgrades”.
The Greggs empire began in 1951 when John Gregg opened his first bakery. The company expanded by acquisitions, buying local bakeries and supplying shops nearby.