Greggs has launched a consultation over plans to restructure its manufacturing operations, with four sites potentially closing and around 740 jobs at risk over the next two and a half years.

As part of its third-quarter trading update, the bakery chain said the proposals would relocate elements of its manufacturing processes to ensure it has sufficient capacity for future growth at a lower cost.

The programme is expected to require around £60m of cash costs, including £40m of capital expenditure, disruption costs and redundancy payments, while generating annual pre-tax operating cost savings of around £20m from 2028 and 2029.

"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. Our immediate priority is to minimise the impact on our people where possible," the company said Wednesday. "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."

The announcement came as Greggs reported a 7.7% rise in total sales for the 13 weeks to 26 September, with like-for-like sales at company-managed shops up 3.4%.

It said improved trading reflected continued menu innovation and more settled weather in August and September, while strong cost control had supported a "modestly improved" expected outcome for 2026.

Year-to-date sales were up 7.4%, with like-for-like sales rising 2.6%. Greggs opened 95 shops and closed 38, including 20 relocations, giving it 2,796 shops at the end of the period.

It continues to target 100 to 110 net new shops in 2026, alongside 12 Greggs Express convenience installations, with the long-term plan to go from 2,796 shops to at least 3,500.

Greggs expects like-for-like cost inflation to remain around 2% in 2026, although it warned of signs of greater inflationary pressure in 2027. New distribution centres in Derby and Kettering are also expected to increase costs in 2027 before contributing to profitable growth thereafter.

Susannah Streeter, chief investment strategist, Wealth Club, said: "Greggs is eyeing up more intense inflationary pressures ahead and is zeroing in on its cost control measures, with fewer factories set to feed more shops. The chain currently operates 14 factory and distribution sites in the UK and this is part of a drive to bake in more efficiency.

"Shareholders have welcomed the baker’s recipe for trimming fat from its manufacturing operations but at the same time keeping plans for opening new stores intact. In a more cost-conscious environment, its value ranges keep enticing hungry customers through the doors."

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