Greggs has reported a drop in profits as it bemoaned “difficult” market conditions affecting consumer confidence and disposable income, amid pressure to prove the UK has not reached “peak Greggs”.
The high street bakery chain, known for its sausage rolls and baked steaks, said statutory pre-tax profits fell 17.9% to £167.4 million for the year to December 27, compared with the previous year. It also reported a slowdown in sales growth at the start of the new year.
Over the past year, Greggs has come under pressure from cautious shoppers hit by the rising cost of living, rising taxes and labor costs, and the growing use of weight-loss treatments.
Last year its chief executive, Roisin Currie, said: “I don’t think we’ve reached peak Greggs at all,” she said, adding that the company had already recovered from “downturns”.
On Tuesday, the company said “relieving inflationary pressures” should lead to higher consumer spending, despite signs that grocery inflation is rising again and the threat of conflict in the Middle East driving up prices further.
However, the retail sector, which employs more than 33,000 people, stressed it had been “resilient” in the face of a “challenging market”.
“The year-on-year profit position reflected challenging market conditions, compounded by the period of particularly warm weather which had a material impact on footfall and consumer behaviour,” it said.
Currie indicated that some of the challenges Greggs has faced could be alleviated during the current year.
He said: “Looking ahead to 2026, easing inflationary pressures should provide some support to consumer spending and demand for convenient on-the-go food continues to underpin the market.”
Currie told PA Media: “We have entered 2026 planning for another challenging year.
“When you analyze consumer confidence and disposable income you can see that the context is still difficult.”
Greggs said the drop in profits was partly related to the difficult market environment and a “period of particularly hot weather” which affected traffic on main roads.
It also told shareholders that total sales grew 6.8% to £2.15bn during the year, with like-for-like growth also boosted by its ongoing store opening programme.
Greggs said it had 121 net store openings in 2025, expanding its retail park to 2,739 locations by the end of the year.
It is aiming for around 120 new openings this year, as it highlighted ambitions to grow to “significantly over 3,000 stores in the UK in the long term”.
Sales growth was also supported by the expansion of the delivery business and the increase in night trading.
Most recently, comparable sales at its managed stores grew 1.6% during the first nine weeks of 2026, with total sales increasing 6.3% thanks to store openings.
Analysts were divided over Greggs’ long-term prospects. A Shore Capital analyst, Darren Shirley, said there was “little to shout about as trading slows.”
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: “Despite the challenges, Greggs is working hard to lay the foundations for future growth. The number of stores is expected to rise from 2,739 to around 3,000 in the coming years as it looks to become more accessible to more people.
“Menus are being adapted to changing customer preferences, and stores are staying open later to capitalize on more late-night customers, the group’s fastest-growing hours. In fact, almost 75% of its stores are now open beyond 5pm.”
PA Media contributed to this report.
