// Greggs warns of job cuts ahead of the government furlough scheme coming to an end
// The bakery launched consultations with staff to cut hours instead of jobs
// Greggs said that demand in shops is expected to remain below normal levels due to Covid-19
Greggs has warned it will resort to scrapping jobs as the government terminates the furlough scheme.
The British food retailer entered consultations with unions and staff over a potential cut in hours in a bid to avoid redundancies.
Greggs said that demand in its shops is expected to remain below normal levels for the “foreseeable future”.
READ MORE: Greggs swings to a loss in half-year results
The government’s Coronavirus Job Retention Scheme will terminate at the end of October.
“We must change the way we work to be as productive and flexible as we can in order to protect as many jobs as possible for the long term,” Greggs said.
Greggs said sales in the 12 weeks to September 26 averaged 71.2 per cent of 2019 levels, but improved to 76.1 per cent in the most recent four weeks.
In recent weeks, Greggs’ sales have recovered to three-quarters of their prior levels.
It said trading had improved slightly in September following a “more challenging month in August”.
However, Greggs was unable to participate in the Chancellor’s Eat Out to Help Out scheme as seating areas remained closed.
Greggs shut 49 shops so far this year and opened 38 new sites, giving it a total of 2039 stores.
It has now opened seating areas in 100 of its shops with social distancing measures in place.
However, Greggs warned its distribution and stock availability could be impacted by the local coronavirus lockdowns.
In the last two months, there have been two outbreaks.
Staff at its Bramley depot tested positive last week, and a similar outbreak in North Tyneside halted production earlier this week.
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