Scarborough-based Woodhead Bakery has gone into administration after being hit by inflation and rising wheat prices.

The 74-year-old family bakery, which has 30 shops in the north east and also supplies Morrisons supermarkets, has been forced to make 30 of its 310 staff redundant, while administrator, the P&A Partnership, is keeping the stores open in the hope of saving the business.

Spokesperson for the company Christopher White, from the P&A Partnership, told British Baker: "We believe that by continuing to trade, we have the best chance of finding a buyer and we have retained as many employees as possible. Unfortunately, Woodhead Bakery has been hit by inflation and the impact of rising global wheat prices, in addition to harsh economic conditions on the high street."

In the financial year to the end of March 2010, Woodhead made a loss of £73,348 with net liabilities of £755,046 less than the £242,992 loss in 2009. In its last financial report, it said the retail business was very stagnant, due to the recession and competition although it said the foodservice business continued to grow with major new customers taken on.

It reported that it had good prospects of future expansion of the business in the near future.

Greggs could be one of the bakery chains poised to buy up any Woodhead sites. A Greggs spokesperson admitted that it had been looking at the North Yorkshire area, including Scarborough, for potential new locations, but would not give details of specific sites.

Cooplands of Scarborough could also be interested, according to Chris Peck, chairman of Cooplands (Doncaster), who said if Woodhead Bakery didn’t have a buyer by the end of the week, all the shops were likely to close. "I can’t see anyone breaking their necks to buy all of them I think the shops will be cherry-picked by companies like Greggs and Cooplands of Scarborough.