Greggs Faces Profit Slump and Slowing Sales in a Challenging Market
The renowned high street bakery chain Greggs has reported a significant decline in profits, alongside a slowdown in sales growth, as it navigates what it describes as challenging market conditions. The company, famous for its sausage rolls and steak bakes, saw statutory pre-tax profits fall by 17.9% to £167.4 million for the year ending 27 December, compared to the previous year.
Market Pressures and Consumer Confidence
Greggs has been under pressure from cautious shoppers affected by the rising cost of living, higher tax and labour costs, and the increasing use of weight-loss treatments. Chief Executive Roisin Currie emphasized the company's resilience, stating, I absolutely don't believe we have reached peak Greggs, and noting that Greggs has historically bounced back from downturns. However, she acknowledged that consumer confidence and disposable income remain tough, with the backdrop still challenging.
The profit drop was partly attributed to a spell of particularly hot weather, which materially impacted footfall and consumer behaviour on the high street. Despite this, Greggs highlighted its resilience in the face of these adversities.
Sales Performance and Expansion Plans
Total sales for Greggs grew by 6.8% to £2.15 billion over the year, supported by a continued store opening programme. The chain reported 121 net store openings in 2025, expanding its estate to 2,739 locations by year-end. It aims for around 120 further openings this year, with long-term ambitions to grow to significantly more than 3,000 UK shops.
Sales growth was also buoyed by the expansion of its delivery business and an increase in evening trade. In the first nine weeks of 2026, like-for-like sales across managed shops grew by 1.6%, with total sales up 6.3% due to store openings.
Future Outlook and Analyst Views
Looking ahead, Currie indicated that easing inflationary pressures should provide some support to consumer spending in 2026, though she cautioned that the year is expected to remain challenging. She pointed to the ongoing demand for convenient food on the go as a key market underpinning.
Analysts offered mixed perspectives on Greggs' long-term prospects. Darren Shirley of Shore Capital noted little to shout about as trading slows, while Aarin Chiekrie of Hargreaves Lansdown highlighted the company's efforts to build foundations for future growth. Chiekrie mentioned that nearly 75% of Greggs stores are now open beyond 5pm, catering to evening customers, the group's fastest-growing day-part.
Greggs employs over 33,000 people and continues to adapt its menus to changing customer preferences, aiming to become more accessible and capitalize on growth opportunities despite the current market headwinds.
