Greggs has put hundreds of workers at risk of redundancy after unveiling plans to shut four factories and replace staff with automated machinery.
The bakery chain said 740 jobs could go between now and 2028 as part of a plan to change where it makes its food.
Greggs will start installing more automated machinery instead of relying on its workforce at the sites, making the existing factories redundant.
It said the changes, which would take place over two and a half years, were needed to make sure it could keep up with demand as the business grows.
The proposals are expected to result in four manufacturing sites closing, while some other sites will stop making food but continue to be used for distribution.
Greggs said it was also considering moving some packing operations into sites it already owns.
The company has started a consultation with affected workers and trade unions. A decision is expected towards the end of November.
The announcement came as Greggs reported a 7.7pc rise in sales in the three months to the end of September, with like-for-like sales up 3.4pc.
The stronger performance, helped by new products including its steak-and-Stilton bake and iced drinks, led Greggs to raise its expectations for profits this year.
Shares in Greggs were up 6pc on Wednesday morning after the announcement.
It has opened 95 shops this year, taking its total to 2,796. It expects to open up to 15 additional shops by the end of 2026.
Roisin Currie, the Greggs chief executive, said: "This is really about Greggs making themselves fit for the future. As we become a stronger growing business, then there are opportunities to consolidate."
Greggs is also spending heavily on two new sites in Derby and in Kettering, Northamptonshire, which will help it supply more shops as the business grows .
The Derby site will start to operate this year while the Kettering site is set to open in 2027. Greggs said the two sites would eventually give it enough capacity to supply at least 3,500 shops.
The new sites will also use more machinery to move and sort food. At Derby, machinery will handle frozen food, while Kettering will use it to move chilled and room-temperature food around the site.
Greggs said the new sites would make its food-making and delivery network more efficient, although they would increase its costs next year before beginning to save money.
The company warned that there were also signs costs would rise more quickly in 2027.
Greggs said about half of its energy costs for next year had already been hedged but warned that higher energy and diesel prices could eventually feed through into the cost of ingredients such as fertiliser, crops and protein.
Greggs said the four proposed closures would cost about £60m, including £40m spent on the changes themselves, as well as the cost of closing the sites and making workers redundant.
Once the changes are complete, Greggs expects them to save about £20m a year.
The savings are expected to come through in 2028 and 2029.
The job cuts follow a strong first half for Greggs. Sales rose 7.2pc to £1.1bn in the six months to June, while pre-tax profits jumped almost 20pc to £76m.
Ms Currie said Greggs would try to find alternative jobs within the business for affected workers where possible, with the company already looking at vacancies in the areas where the factories are based.
