Greggs factory closures|740 job cuts despite 7.7% sales growth?

A strong quarter, fewer factories

Greggs has proposed closing four of its factories, putting around 740 jobs at risk. Its sales are growing faster, yet it wants fewer places to make its food. The same announcement carried the good news. Sales rose 7.7 per cent in the three months to late September. At the shops Greggs runs itself, like-for-like sales grew 3.4 per cent. In the first half of the year, that figure had been 2.1 per cent.

On the strength of that, Greggs raised its outlook for 2026 to what it called a modestly improved outcome. The factory plan, by its own estimate, will cost about £60 million. The savings it expects are not due until 2028 and 2029. The four sites are North Lakes near Penrith in Cumbria, Pettigrews in Kelso in the Scottish Borders, Seaham in County Durham, and Enfield in London. Enfield would keep its distribution work.

They are four of the 14 manufacturing and logistics sites Greggs runs. Against the whole company, 740 jobs is small. Greggs employs about 33,000 people in the UK, most of them in its shops. The proposed cuts amount to roughly 2 per cent of that workforce. The shops themselves are not affected. In the towns, the scale looks different.

Euan Robson, a councillor for Kelso, said the news about Pettigrews had come as a "bit of a shock". He said Greggs is "a very good business and apparently doing well", but "it will be a sad day if the factory does close". In Wales, manufacturing at Treforest would end, though the site would carry on as a distribution centre. Greggs has yet to confirm whether any jobs there are at risk.

The local MP, Alex Davies-Jones, said she is "deeply concerned" about any potential job losses. So the company barely changes size, while a handful of communities carry almost all of the cost. That raises the bar for the reason behind it.

A plan that pays off later

Greggs' own results describe a business that does not need rescuing. The union's general secretary, Sarah Woolley, noted that Greggs was clear in its own announcement that the business continued to "perform strongly". The plan's numbers point somewhere else. It would cost about £60 million in cash. Roughly £40 million of that is capital spending, with the rest going on disruption costs and redundancy payments.

In return, Greggs expects to cut its pre-tax operating costs by about £20 million a year. It says those savings will be realised across the 2028 and 2029 financial years. Set the two figures side by side. Sixty million pounds spent, against twenty million a year saved. That is about three years of savings just to cover the bill. And the clock starts late. The changes would be phased over two and a half years.

They would begin no earlier than the second quarter of next year. So this is not a fix for this year's profit. Greggs said the changes, "whilst difficult, are necessary". It said they are needed to meet "capacity requirements for growth in the years ahead in the most cost-efficient manner". Growth usually means more capacity, and Greggs is planning a lot of growth.

It trades from 2,796 shops and is targeting at least 3,500. That is roughly 700 more shops. Yet the plan leaves it with fewer factories. If it goes ahead, manufacturing would run across six sites: Clydesmill, Gosforth, Balliol, Leeds, Manchester and Derby. Even some of those would do less. The range made at Clydesmill in Glasgow and at Manchester would be reduced.

Tinned bread would no longer be made at Gosforth, and some products would come from specialist suppliers. The capacity is being built elsewhere. Since the start of 2024, Greggs has invested more than £300 million in its supply chain. Much of that is going into two new national distribution centres, in Derby and Kettering. Greggs says they will add storage and automation.

It says they will give it supply chain capacity for at least 3,500 shops. Derby is due to become operational in the final quarter of this year. Kettering is scheduled to open in 2027. The Telegraph described the factory plan more bluntly. It reported that Greggs would install more automated machinery instead of relying on its workforce at the sites.

Greggs' own description is consolidation: moving some manufacturing and packing between sites, and making its food in fewer locations. Either way, in this plan a growing Greggs does not mean more factory jobs.

Two readings of strength

The union and the chief executive point to the same strong results. They draw opposite conclusions. Sarah Woolley, of the Bakers, Food and Allied Workers Union, said the union was "deeply concerned". She said workers had played a huge part in the company's success. Members, she said, will be asking why their jobs "should now be put at risk in the name of efficiency and future progression".

The chief executive, Roisin Currie, answered from the other direction. She said: "This is really about Greggs making themselves fit for the future. As we become a stronger growing business, then there are opportunities to consolidate." Read together, the union treats strength as a reason not to cut. Currie treats it as the moment to cut. Neither statement mentions the people who own the company.

Nor does either mention the costs Greggs expects next year.

The pressure behind the plan

Greggs' shares have had a rough few years. They reached 3,172p in August 2024. By November 2025, they had bottomed out just above 1,400p. That is a fall of more than half. According to Investors' Chronicle, an activist investor called Lauro Asset Management made a demand at the end of 2025. It told Greggs to cut costs or risk a private equity takeover.

The magazine says Greggs has focused on improving profitability since then. It does not say the factory plan was a direct response. On the day the plan was announced, the shares rose 6.5 per cent to 1,997p during trading. The upgrade itself came with a warning. Cost inflation this year is running at about 2 per cent, which Greggs calls well managed.

But it sees "signs of greater inflationary pressures in 2027", as higher energy costs feed through. Currie said about half of the business's energy costs are hedged. Greggs warned that higher energy and diesel prices could eventually feed into ingredients such as fertiliser, crops and protein. And the new distribution centres add costs first.

Greggs said their overheads will increase spending in 2027, "before contributing to profitable growth thereafter". That pressure has to go somewhere. Earlier this year, Greggs raised the price of its best-selling sausage roll by 5p. It now costs £1.35 in most shops. Currie said the business will do everything it can to mitigate price increases.

But she said there is "always an element" of passing higher costs on to customers. Alex Pugh, an analyst at the investment broker Freetrade, put the risk plainly: "a £1.50 sausage roll could be a real test of loyalty". This is where the factory plan and the strong results meet. Greggs said its plan reflects its "focus on remaining the customer's number one choice for value in the market".

The company ties the cuts to keeping its prices competitive, not to rescuing this year's profit. The strong quarter came first in the announcement. The warning about 2027 came with it. The savings, due from 2028, sit just beyond that squeeze.

Still only a proposal

None of this is settled. Greggs stresses that "no final decisions" have been made. A consultation with trade unions and employee representatives is starting. The company says it will work with them to "refine and develop these proposals". The Telegraph reported that a decision is expected towards the end of November. What comes out could differ from what went in.

Greggs has not confirmed whether jobs at Treforest are at risk. The union says its immediate priority is its members, their jobs and their families. Greggs presents its savings as conditional. If the programme is implemented, it expects about £20 million a year from 2028 to 2029. In that case, workers in Penrith, Kelso, Seaham and Enfield carry the cost.

If the consultation changes which sites close, or how many jobs go, the savings figure no longer describes the plan. It was attached to the proposal as announced. Some of the 740 jobs could then be kept. So the puzzle from the start reads differently now. Greggs is not cutting because its sales are weak.

It is paying now for fewer factories and automated depots, against costs it expects next year and savings due from 2028. The thing to watch is the outcome of the consultation, which the Telegraph expects towards the end of November. Whether the four closures and 740 job losses stand will show whose reading of Greggs' strength prevailed.

Informational only, not investment advice. Figures and quotes come from the linked reports.