Walkers Shortbread is closing its fresh goods bakery in a bid to develop more creative new products.

The bakery in Aberlour, Scotland, will be turned into a test and development unit instead of trying to compete with supermarkets’ bread and fresh bakery produce. Walkers will now concentrate on shortbread and oatcakes.

MD Jim Walker said there would be no or few redundancies, with the 20 current bakery staff retrained and employed. Production of fresh bakery goods is scheduled to stop in September although its three shops at Aviemore, Elgin and Grantown will remain open, selling shortbread, long-life cakes and biscuits, and some sandwiches.

The company plans to open a fifth factory - a 70,000sq ft site in Elgin - this autumn and will hire another 100 employees. It will also add 100 seasonal staff to its 1,200-strong workforce over the busy summer period.

Last year, it revealed that 2005 profits were up £1m to £10.8m on sales of £79.8m. Walker said sales had risen to £86m in 2006, while profits had remained at a similar level.

The family business was founded in 1898 and now makes the own-label Walkers’ range, Duchy Originals and Weight Watchers