LONDON — Bakery chain Greggs P.L.C. has announced plans to close three of its 12 bakeries in the United Kingdom as part of a larger strategic plan to transform the company from a decentralized traditional bakery business into a centrally-run, modern, food-on-the-go brand.
“Following a lengthy and detailed review we have concluded that this integrated business model gives us competitive advantage, lying at the heart of our ability to offer outstanding quality and value,” Greggs said. “We intend to invest substantially to support growth and reshape the supply chain in order to compete more effectively in the food-on-the-go market. This requires an investment of around £100 million in a major program over the next five years to create additional manufacturing centers of excellence and increase capacity to support shop expansion substantially beyond 2,000 outlets in the U.K.”
According to Greggs, not all of its 12 bakeries are suitable for long-term investment due to their location and size. As a result, the company said it plans to close bakeries in Twickenham, Edinburgh and Sleaford and use the disposal proceeds to contribute to the investment in its remaining bakeries over the course of the five-year program.
Greggs said it will transfer production and distribution operations from these sites to other bakeries in its network over the next year.
“Alongside these proposed changes in our bakeries we have further steps to take in the centralization of support services, which we believe will require some restructuring amongst our teams deployed in the regions,” Greggs said. “We will be entering into consultation shortly to work with trade unions and employee representatives of those affected to refine and develop these proposals.”
The plant closings are expected to result in the elimination of about 355 jobs, Greggs said.
“These are difficult changes that we believe are needed to support the long-term growth of the business; however our immediate priority is to work to minimize the negative impact on our people, many of whom have worked in these roles for a significant number of years,” the company 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.”Greggs said its recently-acquired distribution facility in London will enable it to invest in its Enfield bakery to create a manufacturing center of excellence in the southeast region, and the company now is planning to invest in the extension of its Clydesmill bakery in Glasgow to create a center of excellence in Scotland. The investments will mark the first phase of Greggs’ five-year program to transform its supply chain.