The street baker has signed a lease at SmartParc SEGRO Derby for a facility geared to his needs for increased production capacity, while supporting the capacity expansion of his logistics network.
Construction of the building is already underway and the first phase of the production and logistics apparatus is planned to be expanded and installed in 2025 and 2026.
In addition to the self-funded capital expenditure to install the equipment, a leased right of use payment of approximately £65 million will also be identified at the start of the lease.
Greggs also said it is in negotiations to acquire land in Corby/Kettering where it plans to expand a national distribution center for refrigerated and ambient products. An exchange of contracts for the acquisition of the land is expected in the coming months.
Such an expansion would allow the baker to expand its logistics capacity across its network to around 3,500 retail outlets (1,000 more outlets than existing grades) supported by picking solutions and semi-automated garages.
The company said it was in line with its previously communicated capital expenditure plans, adding that it will make an investment in projects at its Birmingham and Amesbury distribution centres to offer additional logistics capacity until the end of 2024.
Greggs’ latest business update follows the announcement of the opening of its 2500th store, on an oil concourse at Sainsbury’s Cobham.
In the first 19 weeks of 2024, 64 gross new outlets and 27 net openings were opened. Like-for-like sales increased by 7. 4%, with an overall profit for the era of £693 million.
Meanwhile, Arla has announced that it will invest more than £300 million in four of its facilities across the UK, in addition to previously announced plans for its facility in Taw Valley.