Warburtons set to close Newburn as bread sales fall

Warburtons, which recently reported a £13.5m loss, is planning to close its Newburn bread bakery in Newcastle.

The company said it needed to make changes to its business as consumers continued to switch from bread to other wrapped bakery, such as bagels, flatbread and crumpets. The move does not affect its separate free-from bakery and distribution facility in Newburn.

A year ago, Warburtons stopped bread production at its Stockton-on-Tees site because of the decline in bread consumption.

 “The bakery market continues to be challenging,” said Warburtons in a statement on its latest plans.

“Unfortunately, this means making the very difficult decision to enter into consultation on the proposed closure of our core Newburn bakery. No decision will be made until the thorough consultation is completed and we are supporting everyone affected at this very difficult time.”

Around 100 jobs may be affected by the plans, which will only affect bread prodution and not the free-from bakery at the Newburn site.

Warburtons added that it had invested more than £35m in its infrastructure in the past 18 months to enable it to innovate and meet changing consumer demand.

“We remain committed to our north-east operations and, over the next 12 months, will be making improvements to our free-from bakery and distribution facility with an investment of £3m.”

In the year ended 29 September 2018, Warburtons’ sales fell 3.5% year on year to £506.4m.

In the previous 12-month period, when the company had reported a 0.3% drop in overall sales, revenue had largely been held up by growth in non-bread lines, which include crumpets, bagels and teacakes.

Profits in 2018 had been hit by £19.6m in exceptional costs including those associated with ending bread production in Stockton-on-Tees, and charges against plant and equipment it no longer required.

"Excluding the exceptional costs, the underlying business remains profitable,” said Warburtons chairman Jonathan Warburton at the time.

Recent activity by Warburtons has included the launch of a new bagel range that is being promoted with adverts starring Robert De Niro.

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