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Greggs to cut up to 400 jobs despite sales growth

British baker Greggs said as many as 400 jobs could be scrapped as in-store bakeries are closed and management teams are restructured, despite the fast-food chain's strong Christmas trading numbers.

Greggs shop in Sheffield Credit: Press Association Images

The company said it would work with trade unions and vacancies would be offered to employees working at the in-store bakeries "wherever possible".

Greggs said the cuts would save £6m a year from the middle of next year and £2m this year after costs of £9m for redundancy payments andwrite-offs on in-store baking equipment.

The company said like-for-like sales grew 2.6% in its fiscal fourth quarter, with sales in the five week festive period up 3.1%.

Greggs Christmas sales up 3.1% on last year

Greggs enjoyed a strong Christmas performance. Credit: PA

British baker Greggs said it returned to sales growth in the fourth quarter, helped by strong trading in the Christmas period and putting it on track to post annual results in line with its expectations.

The company, which sells Christmas mince pies as well as iced buns and sandwiches, said that like-for-like sales grew 2.6% in its fiscal fourth quarter, with sales in the five week festive period up 3.1%.

Greggs said underlying sales over its fiscal year 2013 fell 0.8%, reflecting difficult trading conditions earlier in the period.

The baker last year said it was refocusing on its core food-on-the-go business to help it return to sales growth, abandoning a plan to expand into new areas such as cafes.

Pasty tax win fails to stop Greggs sales slump

Bakery chain Greggs' success in fighting off the Government's unpopular pasty tax has failed to rub off on the company's sales figures today.

Despite a profile being boost after a 300,000-strong petition against plans to charge 20% VAT on its hot pasties and sausage rolls, the group's underlying sales were down 3.5% in the second quarter of 2012.

Greggs profits slump continues Credit: Tim Ireland/PA Wire

The group, which has 1,600 shops in the UK, said the deterioration from a decline of 1.8% earlier in the year was driven by the weather which kept shoppers away from the high street.

Profits were down 4.6% to £16.5 million in the 26 weeks to June 30.

However, the group has announced plans to open 28 franchise stores in Moto service stations, creating 500 jobs, following two successful trials as part of plans to expand beyond the UK high street.