HelloFresh’s proposed closure of its Nuneaton distribution center could result in the loss of 900 jobs.
- If approved, the Nuneaton site will remain operational until mid-2025, giving employees time to adjust.
- HelloFresh’s focus on consolidating operations aims to improve product offerings and reduce environmental impact.
- The company reported increased revenues despite a decline in UK workforce over the past year.
- HelloFresh remains committed to supporting its employees during this transitional phase.
HelloFresh has announced its intention to possibly shut down its major distribution facility in Nuneaton, which poses a threat to approximately 900 jobs. This decision is contingent upon pending proposals, which, if sanctioned, will allow the center to continue operations until mid-2025. The site, operational since 2020, spans 237,000 square feet and was established as HelloFresh’s second UK distribution hub.
The company has seen a significant reduction in pre-tax losses in its UK operations, drawing close to a £500 million turnover in the last fiscal year. However, it has also witnessed a decrease in its average workforce, dropping from 2,159 to 1,842 employees. The last recorded pre-tax profit in the region was £8 million in 2020, with recent years marking nearly £50 million in losses.
HelloFresh emphasizes that the proposed closure doesn’t reflect its team’s performance. According to a company statement, “We have made the difficult decision to propose the closure of our distribution center in Nuneaton, subject to consultation.” The firm is opting to consolidate its operations, leveraging advanced parts of its network to offer superior products and minimize emissions and waste.
Throughout this process, the company asserts its commitment to its workforce: “We know how unsettling this can be for our employees, who we are supporting throughout the consultation process.” It further assures prioritization of redeployment opportunities and incentives for those staying until the closure. Employees have been informed well in advance, far exceeding contractual notice periods.
Despite the looming closure, HelloFresh enjoyed a sales upsurge in the third quarter. The broader HelloFresh group, based in Berlin, reported a revenue of €1.83 billion, up from €1.80 billion year-on-year. Co-founder and CEO Dominik Richter remarked, “In meal kits, our focus for the next couple of quarters will be on improving further on an already excellent proposition to our customers, through more meal choice, better value for money and higher service levels.”
Richter also highlighted the strategic direction of the company, aiming for enhanced free cash flow and profitability by being selective in customer acquisition and adjusting the production footprint. He forecasted that the key growth sector for HelloFresh in the upcoming three years is the ready-to-eat (RTE) product line, noting, “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 outcome of the proposed site closure remains uncertain, but HelloFresh’s strategy focuses on operational consolidation and continued support for its workforce.
