Greggs has announced that more than 400 jobs are potentially at risk, due to structural changes to its supply chain and a reduction in general overhead costs.
Published in the group’s trading statement (9 January), Greggs said in a bid to improve the efficiency of its existing bakery network, shops that are currently supplied by in-store bakeries will be transferred to its regional bakery.
Occurring over the next 12 to 18 months, this would involve the de-commissioning of the in-store bakeries across the Greggs estate, resulting in the potential loss of 300 roles.
It added that, to compete effectively in the food-on-the-go market, the business will continue to be simplified to improve efficiency. Proposed restructuring of management and support teams across the country may also result in 110 roles becoming redundant, it said.
In the report, Greggs said: “Wherever possible, we would look to offer existing vacancies to the employees who work in our in-store bakeries, but anticipate that many will leave the business.”
It added: “The proposed changes would result in one-off redundancy costs and asset impairment charges amounting to £9m in 2014, of which £8m would be a cash cost. We anticipate that the ongoing benefit of the cost reduction would be £6m per year from mid-2015 and that, excluding one-off costs, there would be a benefit in 2014 of £2m.”
Greggs concluded that while it has been “encouraged” by the improvement in like-for-like (LFL) sales revealed in today’s report (see original story here), it faces a “year of significant change”.