Greggs to pay workers £7 million bonus
Emma Greedy, January 09, 2020
Workers at the bakery chain will be receiving a share of a special £7 million bonus due to the successful launch of its vegan sausage roll
All 25,000 employees will receive a bonus of up to £300 in their January pay packets with both managers and shop floor staff receiving the same amount.
Staff receiving the full £300 bonus will have been working at the company prior to and including 31 March 2019, with anyone starting after this date receiving £75 for every quarter they have been with the company.
Greggs' 2019 fourth quarter trading update stated: ‘All of our colleagues will share in a one-off payment costing £7 million, which will be paid at the end of January.’
Roger Whiteside, chief executive of Greggs, added: “Our record financial performance in 2019 has enabled us to enhance returns to shareholders. I am delighted to announce that we will also be making a special additional payment to all of our colleagues across the business who have worked so hard to deliver this success in what has been a phenomenal year.”
In its trading update, the company attributes continued growth to the 'huge popularity' of its vegan-friendly sausage roll, and has announced the expansion of the range with the addition of a 'Vegan Steak Bake'.
Given the strength of its trading in the latter part of 2019 Greggs’ board now expects that full-year underlying profit before tax (and after this special payment to employees) will be slightly higher than previously expected.
Vlatka Hlupic, professor of leadership and organisational transformation at Hult Ashridge Executive Education and CEO of The Management Shift Consulting, said: “This is an excellent example of humane leadership where extra profits were not only shared with shareholders and top management but with all employees and their managers. Such a gesture will likely lead to further increases in revenues, engagement and profits.
“I would encourage other workplaces to consider emulating such examples, which would lead to benefits for all stakeholders on a long-term basis.”
For the year ahead, Greggs predicts a number of cost headwinds to be higher than recent figures. It attributed the expected rise to National Living Wage costs increasing faster than general inflation, and the cost of pork continuing to rise significantly.
Unlike Greggs, staff at fellow profit-sharing company John Lewis & Partners may not see extra money in their January pay packets, as its annual Christmas bonus scheme is at risk due to a 'poor' 2019 trading year.