Greggs, Britain’s largest fast-food and bakery chain, has raised its profit forecast for 2026 following stronger-than-expected sales in the third quarter. However, the company simultaneously announced major structural changes. These include plans to close four manufacturing sites that could affect approximately 740 jobs over the next two and a half years.
Strong Q3 Sales Drive Upgraded Outlook
Like-for-like sales at company-managed shops increased by 3.4% in the 13 weeks ending September 26. This marks an acceleration from the 2.1% growth recorded in the first half of the year. Total sales rose 7.7% over the same 13-week period, bringing total sales growth for the first 39 weeks to 7.4%.
According to the Newcastle-headquartered company, the sales momentum was driven by successful new product launches-such as iced matcha lattes, expanded salad selections, and chicken rolls. More favorable and settled weather conditions during August and September also helped offset a slower start to the summer period.
Consequently, Greggs now anticipates a modestly improved underlying pre-tax profit for the full year 2026. This upgrades its previous guidance, which projected a flat result close to last year’s £172 million.
Restructuring Plan and Manufacturing Closures
Despite positive trading results, Greggs has initiated a consultation process to consolidate its manufacturing and distribution network. The proposed restructuring involves closing four manufacturing sites, a move that could result in roughly 740 redundancies over a two-and-a-half-year period.
The potential closures affect facilities in:
- Enfield (north London)-though distribution operations are expected to continue here.
- Penrith (Cumbria)
- Kelso (Roxburghshire, Scotland)
- Seaham (County Durham)
Manufacturing operations at the Treforest site in Wales may also be affected, though the facility will remain open as a business distribution center.
The company outlined the financial scope of the overhaul:
- Estimated cash restructuring costs of £60 million, which includes roughly £40 million in capital expenditure.
- Projected annual pre-tax operating cash savings of £20 million once the program is fully implemented, with primary financial benefits expected across 2028 and 2029.
- Support for future growth managed through new distribution centers located in Derby and Kettering.
“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,” the company stated regarding the proposed job cuts.
Expansion Plans and Future Inflationary Pressures
Greggs continues to push forward with its physical expansion strategy. The chain currently operates 2,796 shops, having opened 95 locations and closed 38 (including 20 relocations) for a net addition of 57 new shops this year. The brand maintains its long-term target of expanding to at least 3,500 locations across the United Kingdom. It remains on track to add between 100 and 110 net new shops throughout 2026 alongside 12 Greggs Express installations.
Looking ahead, management remains cautious about upcoming economic headwinds. While like-for-like cost inflation for 2026 is projected to hold steady at approximately 2%, the company warned investors that greater inflationary pressures could materialize in 2027, impacting wages, energy, and packaging costs.
