Foodservice giant 3663 is considering closing its London depot - just two months after CEO Fred Barnes denied rumours of a possible closure.

An internal memo seen by the Grocer revealed the depot's future was being reviewed following a " financial year in which sales, volume and profit have been below budgeted expectations".

One of the options being considered was a proposal to close the London City depot in Barking, which employs 80 staff, and transfer business to other 3663 depots in High Wycombe, Harlow and Northampton, the memo said.

"Should we decide to go ahead with this closure, all roles at the London City depot will be at risk of redundancy," it added. "This is a business proposal that in no way reflects on the quality of the dedicated staff at the depot, who have provided excellent levels of service as part of 3663."

No decision had yet been made and the company was working with unions GMB and Unite, a 3663 spokeswoman stressed.

3663 has already announced two waves of closures in recent months. Sites in Wakefield and Southampton were closed in August and October respectively, while butchery business The Barton Meat Company shut in January.

In March, The Grocer revealed that depots in Coventry and Newcastle would be closed as part of a "rigorous cost reduction exercise being carried out throughout the business", but Barnes denied that the City of London depot was to close.

Barnes said the company was being forced to make cost savings to improve profitability. The business's distribution arm, which made a loss in the second half of 2008 when profits dropped 25%, had been hurt by the rise in petrol prices and dropping volumes, but would return to profitability in the first half of 2009, he said.

One foodservice boss added: "3663 seem to have lost the plot at the moment, particularly for independents. A recent brochure has some amazing price anomalies."