HelloFresh has announced potential plans to shut down its Nuneaton distribution centre, putting nearly 900 jobs in jeopardy.
- The site, opened in 2020, might remain active until mid-2025 if proposals receive approval, according to HelloFresh.
- This move comes despite HelloFresh UK’s significant reduction in pre-tax losses and near £500 million turnover.
- The company aims to consolidate operations, leveraging advanced network technology to enhance product offerings and reduce waste.
- Sales surged in the third quarter, with HelloFresh reporting €1.83bn in revenues, aiming to expand free cash flows sustainably.
HelloFresh is contemplating closing its Nuneaton distribution centre, a decision that could affect approximately 900 employees. The site, which began operations in 2020, might continue functioning until mid-2025, subject to the approval of proposed plans. The company expressed its intent to manage the transition smoothly, with efforts to redeploy personnel within the business to mitigate job losses.
In the context of recent financial performance, HelloFresh UK has notably decreased its pre-tax losses while achieving a substantial turnover of almost £500 million in the past fiscal year. Despite these gains, there has been a reduction in the average number of employees in the UK from 2,159 to 1,842 over the past year. This decision to potentially close the site does not, according to HelloFresh, reflect the performance of its team.
The strategic redirection is underscored by HelloFresh’s objective to harness more advanced elements of its network to improve its service offerings to customers while simultaneously tackling issues of emissions and waste reduction. The organisation’s commitment to its staff during these challenging times is evident, with promises of support throughout the consultation process and incentives for employees who remain until the site closure.
Amid these developments, HelloFresh has reported an upswing in sales for the third quarter. The broader HelloFresh group, headquartered in Berlin, recorded revenues of €1.83 billion for this period, a slight increase from the €1.80 billion noted in the previous year. Dominik Richter, co-founder and CEO, articulated the company’s focus on enhancing its meal kit proposition by diversifying meal choices, offering better value, and improving service levels. Financial ambitions are directed towards increasing free cash flows and profitability through selective customer acquisition and adjustments in the production landscape.
Richter further highlighted the company’s growth trajectory, particularly in the Ready to Eat (RTE) sector, which is anticipated to drive significant revenue and profit growth over the next three years. He stated, “Today, we are already the RTE market leader in the US and have developed the product, technology and food manufacturing capabilities to reach many more people around the world with our RTE products.”
The potential closure of the Nuneaton site marks a strategic shift for HelloFresh as it seeks operational efficiency and market growth despite the possible impact on employment.
