Greggs, the high street bakery chain, now expects a modestly better result for 2026 after trading picked up through the summer.
Alongside the upgrade, it has proposed closing four manufacturing sites, a move that could make around 740 roles redundant over two and a half years.
The plan would cost about £60 million in cash, including roughly £40 million of capital expenditure plus disruption costs and redundancy payments.
In return, Greggs expects annual savings of around £20 million in pre-tax operating costs, realised across the 2028 and 2029 financial years.
The company makes and distributes most of what it sells, and argues the changes will keep costs down as it builds capacity to serve at least 3,500 shops.
A consultation with trade unions and employee representatives will begin shortly.
Summer sales pick up
Total sales rose 7.7% in the 13 weeks to 26 September.
Like-for-like sales in company-managed shops, which strip out the effect of new openings, climbed 3.4%.
Over the first 39 weeks of the year, total sales are up 7.4% and like-for-like sales 2.6%.
New products and more settled weather in August and September did most of the work.
Iced drinks, including Matcha and Cherry Lemonade flavours, sold well over the summer, as did relaunched salads and protein-led options.
The new Steak & Stilton Bake has also started strongly.
Shop count grows
Greggs has opened 95 shops this year and closed 38, including 20 relocations, leaving 57 net new openings.
That takes the estate to 2,796 shops, of which 2,157 are company-managed and 639 are franchised.
It still expects 100 to 110 net openings for the full year, which points to a busy final quarter.
Recent additions include its 50th drive-thru, in Sunderland, and a fifth "bitesize" outlet inside a Tesco superstore in Southwark.
Costs to rise next year
Cost inflation is holding at about 2% on a like-for-like basis this year.
However, Greggs sees signs of greater inflationary pressure in 2027.
New distribution centres in Derby and Kettering will add to costs next year before contributing to profit growth from then on.
The Derby site starts frozen storage and picking in the final quarter, while Kettering opens in 2027 with more automation.
So the sausage roll maker gets a better 2026, a costlier 2027 and, if the consultation goes to plan, a leaner cost base by the end of the decade.
