FDBusiness.com

Greggs, the UK retail bakery group, is investing £100 million across its manufacturing and distribution operations. The investment programme is part of a strategic plan to grow Greggs and transform it from a decentralised traditional bakery business into a centrally-run modern food-on-the-go brand. Greggs is unusual in this sector in that it is vertically-integrated, owning and operating manufacturing facilities and its logistics network.

Following a lengthy and detailed review, Greggs has concluded that this integrated business model gives it a competitive advantage, lying at the heart of its ability to offer outstanding quality and value.

Greggs plans to invest substantially to support growth and reshape the supply chain in order to compete more effectively in the food-on-the-go market. This requires an investment of around £100 million in a major programme over the next five years to create additional manufacturing centres of excellence and increase capacity to support shop expansion substantially beyond 2,000 outlets in the UK.

Greggs currently operates from twelve bakeries. However, not all are suitable for long-term investment due to their location and size. As a result Greggs is proposing to close three bakeries and use the disposal proceeds to contribute to the investment in its remaining bakeries over the course of the five-year programme.

The bakeries proposed for closure are Twickenham, Edinburgh and Sleaford. Greggs aims to agree a programme to transfer production and distribution operations from these sites to other bakeries in its network over the next year. The closures are expected to result in a total of 355 roles becoming redundant.