East Anglia: Jobs at risk under plans by Gregg’s to end in-store baking
15:46 09 January 2014
Retail baker Greggs today warned of more than 400 job cuts, despite reporting that it “traded well” over the Christmas and New Year period.
The chain is planning to close its remaining 79 in-store bakeries over the next 12 to 18 months and will instead supply the stores from its network of 10 regional bakeries which already serve most of its 1,671 outlets.
This is expected to result in 300 jobs becoming redundant and a further 110 posts are also at risk under plans to restructure its management and support teams around the country.
Greggs said in a statement that the remaining in-store bakeries were a legacy of past acquisitons by the group and it would be more efficient for them to be supplied from its larger regional bakeries. The management changes would also “simplify the business and improve efficiency”, it added.
A company spokeswoman said that, as the proposals were subject to staff consultation, the company would not at this stage be publicly naming the branches affected by the plan to decommission its in-store bakeries.
Greggs has more than 20 stores across Suffolk and north Essex, many of them already supplied from a £1million regional bakery in Norwich which the company opened in May 2012.
However, it is understood that a significant proportion of the in-store bakeries affected are in southern and eastern England, into which Greggs expanded from its heartland in the north in the mid-1990s through the acquisition of the former Baker’s Oven chain, which baked in-store at most of its branches.
Greggs said the proposed changes would result in one-off redundancy costs and charges totalling £9million in 2014. They would result in cost savings worth £6m a year from mid-2015, with a benefit in 2014 of £2m excluding the one-off costs.
“We will be entering into a consultation exercise shortly to work with trade union and employee representatives of those affected to refine and develop the proposals,” it added.
Greggs said like-for-like sales rose 3.1% in the five weeks over the festive period and by 2.6% during the fourth quarter of 2013,
Sales for the 52 weeks to December 28 would be up 3.8% in total, although down by 0.8% on a like-for-like basis, and the group’s full-year results were expected to be in line with previous expectations, it added.