Greggs Maintains Expansion Plans Despite Sharp Profit Decline
Bakery chain Greggs has reported a significant slump in annual profits but remains steadfast in its ambitious store opening strategy, while also rewarding staff with a substantial £20.2 million bonus. The company, renowned for its sausage rolls, saw statutory pre-tax profits fall by 17.9% to £167.4 million for the year ending December 27, 2025, with underlying profits dropping 9.4% to £171.9 million.
Store Growth and Sales Performance
Despite the profit downturn, Greggs expanded its retail footprint by adding a net 121 branches in 2025, bringing its total estate to 2,739 locations. The firm aims to open approximately 120 more stores this year, targeting over 3,000 UK shops in the long term. This expansion contributed to a 6.8% increase in overall takings, reaching £2.15 billion, although like-for-like sales in stores open at least a year grew by just 2.4%.
In the first nine weeks of 2026, like-for-like sales growth slowed further to 1.6%, reflecting ongoing challenges in the on-the-go eating market. Greggs attributed the profit decline to rising fixed costs in manufacturing, logistics, and technology, coupled with lower sales volumes in established stores.
Strategic Shifts and Market Adaptation
Greggs is diversifying its store locations beyond traditional high streets, opening outlets in petrol forecourts, supermarkets, retail parks, hospitals, university campuses, and transport hubs such as Manchester Airport and railway stations in Leeds, Dartford, and London's St Pancras. The chain is also responding to evolving consumer dietary preferences, including increased demand for protein-rich options, higher fibre content, and smaller portions.
Chief Executive Roisin Currie highlighted the company's resilience, noting that easing inflationary pressures may support consumer spending in 2026. Greggs has adjusted menu prices, with items like the sausage roll rising by 5p to £1.35 and a regular latte increasing by 10p to £2.25, though the firm hopes cost pressures will diminish.
Employee Benefits and Analyst Insights
Greggs announced a £20.2 million profit share for its 33,000 employees, distributed from 10% of annual profits. Staff can also participate in a sharesave scheme after three months, purchasing discounted company shares, and become eligible for the profit share after six months. Analysts offered mixed reviews: Darren Shirley of Shore Capital described the results as "little to shout about," while Aarin Chiekrie of Hargreaves Lansdown praised the strong sales finish and conservative profit guidance, suggesting potential for growth if consumer conditions stabilise.
The company continues to innovate, with nearly 75% of stores now open beyond 5pm to capture evening trade, and ongoing menu adaptations to meet health trends. With a robust balance sheet and reduced infrastructure investments, Greggs remains focused on broadening accessibility and enhancing customer engagement through its app.
