Wednesday 19th Dec 2018 - Logistics & Supply Chain

Greggs seeks £6m saving from supply chain changes

Bakery group Greggs completed the restructuring of its supply chain ahead of schedule and expects annual savings of some £6m as a result, the company said in its annual results.

It has consolidated its 79 in-store bakeries into its regional bakery network as part of a strategy to make its supply and support functions simpler and more efficient. The changes resulted in one-off redundancy costs and asset impairment charges amounting to £8.2 million in 2014.

It plans to continue to reduce the structural costs in the business by focusing on making operations simpler and more efficient. “In our supply chain the direction of change will continue to be towards consolidation in manufacturing where we are not capacity-constrained while growing logistics capacity to support shop expansion plans.”

GreggsLast year Greggs selected SAP as its core ERP software supplier and is now planning the implementation of modules designed to improve processes around shop ordering and customer contact.

“We continue to expect the programme to make an annual net contribution of around £6.0 million once the key functionality is in place around four years from now,” it said.

Group sales were up 5.5 per cent to £804m in 2014, while operating profit was up by almost 50 per cent to £49.6m.

Chief executive Roger Whiteside said: “2014 was a year of significant change and an exceptional step up in performance for Greggs as we began to implement our new strategic plan centred on the growing food-on-the-go market. We have improved both our food offer and the shop experience for customers.

“Market conditions have been more favourable and like-for-like sales have grown throughout the year. This has resulted in record underlying profits for the financial year. Overall we are confident of delivering a further year of good growth and progress against our strategic plan in 2015.”

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