Greggs Faces Profit Decline and Slowing Sales in a Challenging Retail Environment
The renowned high street bakery chain Greggs, famous for its sausage rolls and steak bakes, has reported a significant slump in profits and a slowdown in sales growth, raising questions about whether the UK has reached "peak Greggs." The company's statutory pre-tax profits fell by 17.9% to £167.4 million for the year ending December 27, compared to the previous year, amid tough market conditions that have impacted consumer confidence and disposable income.
Market Challenges and Consumer Pressures
Greggs has been under pressure from cautious shoppers affected by the rising cost of living, higher tax and labour costs, and the increasing popularity of weight-loss treatments. The company noted that a spell of particularly hot weather also had a material impact on footfall and consumer behaviour, contributing to the profit decline. Despite these hurdles, Greggs emphasized its resilience in a challenging market, with total sales growing by 6.8% to £2.15 billion over the year, supported by a continued store opening programme.
Expansion and Strategic Growth Initiatives
In 2025, Greggs expanded its shop estate with 121 net store openings, bringing the total to 2,739 locations by year-end. The chain is targeting around 120 further openings this year, with ambitions to grow to significantly more than 3,000 UK shops in the longer term. Sales growth has also been buoyed by the expansion of its delivery business and an increase in evening trade, with nearly 75% of stores now open beyond 5pm to capture more customers during this fast-growing day-part.
Leadership Outlook and Future Prospects
Chief Executive Roisin Currie expressed confidence in the company's ability to bounce back, stating, "I absolutely don't believe we have reached peak Greggs." She highlighted that easing inflationary pressures should provide some support to consumer spending in 2026, although she acknowledged that the backdrop remains tough with ongoing challenges in consumer confidence and disposable income. Currie told PA Media that Greggs is planning for another challenging year but remains focused on adapting menus to changing customer preferences and enhancing accessibility.
Analyst Perspectives and Recent Performance
Analysts have mixed views on Greggs' long-term prospects. Darren Shirley of Shore Capital noted "little to shout about as trading slows," while Aarin Chiekrie of Hargreaves Lansdown pointed out that despite the challenges, Greggs is building foundations for future growth through store expansion and menu adaptations. More recently, like-for-like sales across managed shops grew by 1.6% over the first nine weeks of 2026, with total sales up 6.3% due to store openings, indicating some resilience in the face of ongoing market pressures.
