Greggs puts jobs at risk as baker braces for worse inflation

Greggs has announced a shakeup of its manufacturing processes which could lead to the closure of four factories and cost 740 jobs, as the baker warns of “greater inflationary pressures” across its business.

The sausage roll seller told shareholders on Wednesday that it is consulting on a move to consolidate its manufacturing operations, which would initially cost £60m but save the firm £20m each year. 

The bakery chain said improved sales have “modestly improved” its outlook for this year, though it warned that “there are signs of greater inflationary pressures” to come in 2027.

The group said the potential redundancies are the result of a “comprehensive” review into how it can best streamline its production to support its ambition of reaching 3,500 bakeries in the UK. 

“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,” Greggs told shareholders.

“We will enter into a consultation period shortly to work with trade unions and employee representatives of those affected to refine and develop these proposals.”

Greggs’s sales were up by 7.7 per cent in the last three months, marking an acceleration from 7.2 per cent growth in the first half of this year. Like-for-like sales at the firm’s managed shops also accelerated from 2.1 to 3.4 per cent. 

The bakery said its new menu items, including Matcha lattes and salads, helped drive sales during the summer. The food seller recently unveiled a new steak and stilton bake, which it said has been met with “highly successful” trading.

The group said it continues to expect costs to increase at a rate of two per cent as a result of “challenging market conditions”. 

Greggs’s efforts to bear down on cost inflation “has supported performance in 2026, though there are signs of greater inflationary pressures in 2027,” the firm said. 

“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.”

The bakery chain has opened 57 new shops in the year to date, on a net basis, with plans to have opened between 100 and 110 by the end of 2026. 

In the last three months, the company opened its fifth smaller-format ‘bitesize Greggs’ at a Tesco superstore in Southwark, London, and its 50th drive-through site, in Sunderland.