Greggs set to axe more than 700 factory jobs as it warns of higher costs

Greggs is set to axe more than 700 manufacturing jobs as part of an overhaul to keep costs down, as the bakery chain warns of ‘greater inflationary pressures’ and a ‘challenging’ market. 

The FTSE 250 baker has launched a consultation to close four of its 14 manufacturing and logistics sites, leading to the loss of 740 jobs over the next two and a half years.

Greggs controls the production and distribution from its manufacturing facilities directly to its 2,796 stores. 

‘We have carried out a comprehensive review to determine where our future manufacturing activity should most effectively be located to ensure we can continue to offer the exceptional value that Greggs is famous for,’ it said.

The planned closures are at sites in Enfield, North Lakes, Pettigrews and Seaham, the company said, with distribution operations at Enfield unchanged. The closures are forecast to cost £60million but save an annual £20million.

Greggs added: ‘We believe such changes, whilst difficult, are necessary to ensure Greggs continues to meet capacity requirements for growth in the years ahead in the most cost-efficient manner.’

It came as the retailer warned costs would continue to rise at a rate of two per cent amid ‘challenging market conditions’, and it warned ‘there are signs of greater inflationary pressures in 2027’. 

‘Our proposals to reshape our manufacturing footprint reflect the evolution of the business and our focus on remaining the customer’s number one choice for value in the market,’ it said. 

Chief executive Roisin Currie said the business ‘will do everything we can to mitigate price increases’ but warned there was ‘always an element’ of passing on higher costs to customers. 

But she insisted any increases would be kept ‘as low as possible’ and that Greggs would keep its leading position for value in the food-to-go market. 

The group, known for its sausage rolls, steak bakes and sweet treats, managed to defy the high street gloom in the third quarter. 

Sales accelerated in the 13 weeks to 26 September, helped by the launch of new products, including its Matcha drinks and Steak and Stilton bake, and more settled weather in August and September.

Company-managed shop like-for-like sales rose 3.4 per cent in the third quarter, having been up 2.1 per cent in its first half.

It means Greggs expects a ‘modestly improved outcome for 2026’, having previously forecast a similar underlying pre-tax profit to last year’s £172million.

But Currie warned consumer confidence was ‘still negative and still very fragile’. 

Greggs has opened 57 net new shops this year, and expects to open between 100 and 110 this year, in addition to 12 self-service ‘Greggs Express’ stores. 

But it warned that the proposed restructuring of its manufacturing operations and ongoing works at its planned national distribution centres in Derby and Kettering would hit profits.

Shares in Greggs rose 7.6 per cent to 2,018p in early trading, bringing this year’s gains to 20.3 per cent.  

Alex Pugh, Analyst, Freetrade, said: ‘The home of the sausage roll leaned on matcha and cherry lemonade to get through a scorching summer, and its push into protein, salads, and functional drinks shows it’s following customers towards healthier habits.

‘Savour the 2026 upgrade, because Greggs is already flagging higher costs and inflation for 2027. The high street stalwart has survived a heatwave and a cost-of-living crisis, but a £1.50 sausage roll could be a real test of loyalty.’