Morrisons has made a U-turn on its decision to close down its Rathbones bakery business, and will instead be running a downsized version of operations.

The Rathbones manufacturing site in Wakefield, which will now only bake specialist products including pancakes, crumpets, pittas and rolls, has been kept open on a smaller scale by Morrisons following talks with the Bakers, Food and Allen Workers Union (BFAWU), The Grocer reported.

In November, the retailer first unveiled plans to close the bakery business after it had struggled to make it profitable and it had been loss-making “for a number of years”.

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However, the supermarket giant had been exploring the possibility of maintaining a smaller, specialised bakery division.

Following a consultation period with the bakery’s 378 staff members it is understood that 270 took up voluntary redundancy, while Rathbones will continue to employ 138 colleagues.

A Morrisons spokesperson told The Grocer: “The new Rathbones will operate on a different model with lower capacity and making fewer, more specialist bakery products,” adding that despite its previous financial struggles, it is on “a pathway to breakeven in 2027”.

“We are grateful to colleagues and the union for the constructive and realistic discussions, which resulted in this agreement, enabling Rathbones to remain open, contributing to the local economy and to Morrisons and our customers.”