(Image: Tim Ireland/PA Wire)
Greggs has announced plans to close four manufacturing sites, with around 740 jobs expected to be lost over the next two-and-a-half years.
The high street bakery giant said the proposed closures form part of a major overhaul of its food manufacturing operations, with parts of the production process set to be relocated.
The changes are expected to cost Greggs around £60 million, including disruption costs and redundancy payments.
However, the company said the shake-up is expected to deliver savings of around £20 million across the 2028 and 2029 financial years.
The announcement comes as Greggs reported a 7.7% rise in sales for the three months to September 26, compared with the same period last year.
The retailer said trading improved throughout the quarter, helped by new product launches and “more settled weather” during August and September.
But analysts warned that the manufacturing overhaul represents a significant challenge for the bakery chain as it prepares for higher costs and inflation.
Alex Pugh, analyst at Freetrade, said: "Greggs is quietly becoming a drinks brand. The home of the sausage roll leaned on matcha and cherry lemonade to get through a scorching summer, and its push into protein, salads, and functional drinks shows it's following customers towards healthier habits.
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"New shops are doing most of the work. Existing stores delivered less than half the growth, and once inflation is taken into account, customers aren't buying much more than they did a year ago.
"Q4 will see a sprint on the building sites. To hit its target, the sausage roll superpower needs to open roughly three-quarters as many shops in the final quarter as it managed in the first nine months.
"The factory shake-up is the tougher news. Around 740 jobs could go, which is a big call for a business proud of making its own products, though spending £60m to save £20m a year pays for itself in about three years."