Bold claim: Greggs’s profits are slipping as a tough consumer backdrop dampens hopeful growth and leaves questions about the chain’s long-term expansion. But here’s where it gets controversial: can the famous sausage roll empire truly keep expanding when shoppers face higher living costs and tighter budgets? This is the core tension we’ll unpack.
Original context and key details:
- Greggs, the high-street bakery chain known for sausage rolls and steak bakes, reported a drop in pre-tax profits, down 17.9% to £167.4 million for the year ending 27 December, with sales growth slowing early in the new year.
- The company attributes the downturn to challenging market conditions that have dented consumer confidence and disposable income. Rising living costs, higher taxes, and increased labor costs have weighed on shoppers, while some people are turning to weight-loss treatments.
- CEO Roisin Currie previously stated she did not believe the UK had reached “peak Greggs,” noting the company’s past ability to rebound from downturns. The latest update reiterates that optimism, while acknowledging near-term pressures.
What traders and executives are watching:
- Inflation looks to ease in 2026, which could help lift consumer spending. Still, grocery price inflation is not entirely behind us, and global uncertainties (including geopolitical tensions) could push prices higher again.
- Greggs emphasizes resilience in a challenging market and points to factors that helped it weather the period: a store-opening program that expanded its footprint and a steadily growing delivery and evening-service demand.
Performance metrics and strategic moves:
- Total annual sales rose 6.8% to £2.15 billion, driven partly by new store openings and a robust like-for-like performance in a portion of the year.
- The business added 121 net new stores in 2025, bringing the total to 2,739 locations. The plan for 2026 calls for roughly 120 additional openings, with ambitions to exceed 3,000 UK shops over the longer term.
- Growth in like-for-like sales in early 2026 remained positive (1.6% in the first nine weeks), supported by a stronger delivery channel and more evening footfall.
Analyst perspectives:
- Views on Greggs’s long-term potential are mixed. Some see limited upside as trading slows, while others highlight a constructive growth path: expanding the store network to roughly 3,000 stores, adapting menus to evolving customer tastes, and extending hours to attract more evening customers—nearly 75% of stores now remain open after 5pm.
Bottom line for readers:
- The profit decline underscores how macro pressures and weather can dent foot traffic, even for a highly recognizable, low-price-value brand. Yet Greggs maintains that an easing inflation environment and a broader strategy of store expansion, menu adaptation, and greater evening demand could sustain its growth trajectory in the medium term.
Discussion prompts:
- Do you think Greggs can sustain greater store density and later operating hours without sacrificing margins? How important is the delivery and evening-sales push to the brand’s future success? Share your views on whether the market has truly reached or not reached “peak Greggs.”
