Greggs has reported a slump in profits as it bemoaned “challenging” market conditions hitting consumer confidence and disposable income, amid pressure to prove the UK has not hit “peak Greggs”.
The high street bakery chain, known for its sausage rolls and steak bakes, said statutory pre-tax profits fell by 17.9% to £167.4m for the year to 27 December, compared with a year earlier. It also reported a slowdown in sales growth over the start of the new year.
Over the past year, Greggs has come under pressure from cautious shoppers affected by the rising cost of living, higher tax and labour costs, and the growing use of weight-loss treatments.
Last year, its chief executive, Roisin Currie, said: “I absolutely don’t believe we have reached peak Greggs,” she said, adding the company had previously bounced back from “downturns”.
On Tuesday, the company said “easing inflationary pressures” should lead to stronger consumer spending, despite signs of grocery inflation creeping back up and the threat of conflict in the Middle East further pushing up prices.
Nevertheless, the retail business, which employs more than 33,000 people, stressed that it had been “resilient” in the face of a “challenging market”.
“The year-on-year profit position reflected challenging market conditions, compounded by the spell of particularly hot weather that had a material impact on footfall and consumer behaviour,” it said.
Currie indicated that some of the challenges Greggs has faced could ease over the current year.
She said: “Looking into 2026, easing inflationary pressures should provide some support to consumer spending and demand for convenient food on the go continues to underpin the market.”
Currie told PA Media: “We have come into 2026 planning for another challenging year.
“When you look at consumer confidence and disposable income you can see that the backdrop is still tough out there.”
Greggs said the drop in profits was partly linked to the tough market backdrop and a “spell of particularly hot weather” that knocked high street footfall.
It also told shareholders that total sales grew by 6.8% to £2.15bn over the year, with like-for-like growth also buoyed up by its continued store opening programme.
Greggs said it had 121 net store openings in 2025, expanding its shop estate to 2,739 locations by the end of the year.
It is targeting about 120 further openings this year as it highlighted ambitions to grow to “significantly more than 3,000 UK shops over [the] longer term”.
Sales growth was also supported by the expansion of its delivery business and an increase in evening trade.
More recently, like-for-like sales across its managed shops grew by 1.6% over the first nine weeks of 2026, with total sales up 6.3% on the back of store openings.
Analysts were split on the long-term prospects for Greggs. A Shore Capital analyst, Darren Shirley, said there was “little to shout about as trading slows”.
Aarin Chiekrie, an equity analyst at Hargreaves Lansdown, said: “Despite the challenges, Greggs is working hard to build the foundations for future growth. The number of shops is set to rise from 2,739 to around 3,000 over the next few years as it looks to become more accessible to more people.
“Menus are being adapted to changing customer preferences, and shops are staying open later to cash in on more evening customers – the group’s fastest growing day-part. In fact, nearly 75% of its stores are now open beyond 5pm.”
PA Media contributed to this report
