The high street baker has entered into an agreement for lease on a site at SmartParc SEGRO Derby for a facility focused on its increased manufacturing capacity needs, while also supporting the expansion of its logistics network capacity.
Construction on the building is currently underway, with plans to develop and install the first phase of the manufacturing and logistics equipment through 2025 and 2026.
In addition to the self-funded capital expenditure to install the equipment, a leased right-of-use asset of about £65m will also be recognised on the commencement of the lease.
Ongoing negotiations
Greggs also confirmed it was in negotiations to purchase land in the Corby/Kettering area where it planned to develop a national distribution centre for chilled and ambient goods. An exchange of contracts for the purchase of the land is expected in the coming months,
Such an expansion would allow the baker to extend its logistics capacity across its network to circa 3,5000 shops – a 1,000 store boost from current levels – supported by semi-automated storage and picking solutions.
The company reported it was in line with its previously communicated capital expenditure plans, including the investment in projects at its Birmingham and Amesbury distribution centres to deliver additional logistics capacity by the end of 2024.
Sausage roll production
A fourth production line for its sausage rolls and bakes at Balliol Park in Newcastle has now been commissioned, which it claimed would increase production capacity at the site by 35% over time.
Greggs latest trading update followed the announcement it had opened it 2,500th store, located in a petrol forecourt at Sainsbury’s Cobham.
In the first 19 weeks of 2024, it saw 64 gross new shops opened and 27 net openings. Like for like sales were up 7.4%, with total sales for the period worth £693m.
Meanwhile, Arla has said it will be investing more than £300m into four of its sites across the UK, in addition to its previously announced plans for its Taw Valley site.
