High street chain Greggs said it plans to close three bakeries with the loss of 355 jobs as it reshapes the business.
The Newcastle upon Tyne-based chain said it will close sites in Edinburgh, Twickenham in London and Sleaford in Lincolnshire as part of a £100 million investment to upgrade its bakeries over the next five years.
The group, which currently runs 12 bakeries and just under 1,700 shops, said the posts will be axed as a result of the reorganisation.
It said: “Wherever possible we would look to offer alternative employment to affected employees but, due to the location of our sites, we anticipate that unfortunately many will leave the business.”
The group added that further improvements to its sandwich range and the addition of free-range egg omelettes to its breakfast menu saw pre-tax profits jump 25.4% to £73 million in the year to January 2 compared to 12 months ago.
Shares in the FTSE 250 jumped more than 13%.
It also said it would increase the pay of its shop floor workers by 5% to £7.47 an hour to maintain “a premium over the statutory minimum”.
Chancellor George Osborne said in his July Budget that the UK’s hourly minimum wage from next month will lift to £7.20 for over-25s from its current level of £6.50, and to at least £9 an hour by 2020.
The retail chain opened 122 new shops last year and closed 74, as the business trims its high street presence in favour of more outlets in retail parks and motorway service stations.
It also refurbished 202 shops in 2015, and upgraded 20 stores to cafe conversions.
Chief executive Roger Whiteside said: “In 2015 we delivered another excellent performance in the second year of our strategy to transform Greggs from a traditional bakery business into a modern, attractive food-on-the-go retailer.”
It added that as part of its bakery reorganisation the Clydesmill bakery in Glasgow and a newly acquired site in Enfield in London will become “manufacturing centre of excellence”, as the business develops more diversified food ranges.
Analysts at Shore Capital said Greggs had enjoyed “a very strong year, characterised by a sustained period of upgrades.”