Latest news with #high street
The Independent
an hour ago
- Business
- The Independent
Greggs profits slide due to hot weather and cautious customers
Greggs has revealed a slump in profits as it was knocked by hot weather and caution among shoppers over their finances. The boss of the high street bakery chain said that many consumers are 'saving rather than spending' due to continued pressure on their household finances. The Newcastle-based business revealed that pre-tax profits fell by 14.3% to £63.5 million for the half-year to June 28, compared to a year earlier. It said the first half of 2025 was impacted by 'challenging market footfall, more weather disruption than in 2024' and increased costs. Earlier this month, Greggs told shareholders that soaring temperatures in June dragged on demand for its hot food over the month. On Tuesday, the group added that it was also affected by heavy snow and strong winds in January. Roisin Currie, chief executive of Greggs, told the PA news agency that it has experienced 'challenging' conditions on the high street this year. 'If you look at all the consumer confidence data, it remains low and points to cautious and fragile customers,' she said. 'They are saving rather than spending and that means they aren't out and about on the high street as much. 'Customers are worried about their finances and being very careful about their spending, but we do think Greggs is in a positive position because of our strong value offer.' The retail business said sales still grew by 7% to £1.03 billion for the half-year, as it was buoyed by new stores. Greggs said like-for-like sales across company-managed stores grew 2.6%, with 4.8% growth across franchise sites. Ms Currie also said the business still believes it can expand to 'significantly more than 3,000' sites across the UK. In the latest half-year, Greggs opened 87 new stores but also shut 56 sites, leaving it with an estate of 2,649 shops at the end of June. It said it is on track for between 140 and 150 net new shop openings this year, with more store openings weighted to the second half of 2025. Ms Currie added: 'After a challenging start to 2025 we remain clear on the strategic opportunities that lie ahead. 'Through our disciplined estate expansion and focus on innovation, Greggs is evolving its offer further and making the brand more convenient for a wider range of customers. 'The outlook for cost inflation is unchanged and we are making great progress in building the supply chain infrastructure that will support the next phase of growth.' Mark Crouch, market analyst at EToro, said: 'Greggs has long been a reliable read on the UK high street. 'Its sudden stumble suggests consumers may not just be cooling on sausage rolls, but that appetite across the high street may be waning more broadly. 'With inflation easing and real wages recovering, the macro backdrop should, in theory, be supportive. That it isn't showing up in Greggs' numbers is a red flag.' Greggs shares were 2.2% lower in early trading on Tuesday.
The Independent
18 hours ago
- Business
- The Independent
Is Greggs about to go the same way as Starbucks?
As anyone who binged on Christmas chocolate as a child with predictably messy results can testify: you can have too much of a good thing. This appears not to have occurred to high street baker Greggs, which now sells more than 1m of its iconic sausage rolls a day. The company opened 226 new outlets last year, a number that falls to 145 net after factoring in closures and the relocation of existing stores – but it's still wildly impressive for our supposedly stagnant high streets. A similar number of new stores is planned for this year. The chain has its roots in the north, so it has been targeting the south, as well as transport hubs: train stations, airports and the like. But might its runaway popularity be a problem? The Greggs estate now amounts to more than 2,600 stores, some of which are within a very short walk of each other. This can create the sort of problems familiar to American owners of fast-food franchises, sold by the likes of McDonalds or Subway. This bunching-up, sometimes referred to as the ' Starbucks overreach ', can boost brand visibility and increase impulse buys. But when overdone, it risks cannibalising sales. In our bigger cities, you're never far from a frappuccino served in a cup with the mermaid trade mark – but who needs a high-street branch every 100 metres? It doesn't make business sense. Just for fun, I checked out the number of Greggs outlets in the Norfolk and Suffolk market towns I yomped around as a cub reporter for the Eastern Daily Press using the company's website. King's Lynn, a town with a population of a shade under 50,000 people, has three Greggs, the closest pair of which are separated by a mere 240 metres. Over the border in Suffolk, Lowestoft (population 71,000) boasts the same number. So, funnily enough, does Thetford, with a population of just over 25,000. Lowestoft must be feeling short-changed on a per head of population basis. All that extra space helped Greggs break the £2bn revenue barrier last year. But the company has slowed down markedly in terms of sales growth, falling from 52 per cent in 2021 to 11 per cent last year. And even that comes with a caveat. Same-store sales, which strips out the impact of new openings and closures with the aim of assessing the performance of the underlying business, increased by just 5.5 per cent. However, the company admitted its sales growth declined to an almost pedestrian 2.5 per cent in the fourth quarter of 2024 in company managed stores, and to just 1.7 per cent in the first nine weeks of 2025. Could the board spell 'saturation' for me? Scepticism about where Greggs goes from here is reflected in the shares, which have found themselves on an end-of-day discount. Over the last 12 months, the company, which holds a place in the second tier FTSE 250 index, has shed roughly £1.2bn of value on the London Stock Exchange. An investment of £100 a year ago would today be worth £57. If you had invested that same £100 in the FTSE 100, it would be worth nearly £110, both excluding dividends. I'm not knocking the brand, which remains much-loved. The first thing I had after a road accident led to me suffering through more than three months of hospital food was a Gregg's sausage roll. Perhaps not unconnected, I am also currently researching a new book, a history of the sausage. But Greggs is about far more than its iconic pastry-wrapped product. It has proved itself to be a nimble business, capable of updating its concept on the fly. It was once a pure bakery, selling freshly baked bread and the like. It looks very different today, with that focus on takeout and a healthier product line-up to suit modern tastes, not to mention the political climate. The vegan version of those sausage rolls have proven a huge hit. All very well, but if the group hasn't reached saturation point, it can't be far from it. Which begs the question: after, I don't know, opening a fourth branch in Lowestoft, isn't it time to look at the export market? You can understand why the board might feel a little twitchy about that. A brief foray into Belgium was less than successful, with the group ultimately pulling the plug on the loss-making venture. British retailers have a long and unhappy history of trying – and failing – overseas. Even Tesco, which has the largest market share among UK supermarkets, taking one in every four pound from grocery shoppers, has retreated from international markets to focus on the UK and Ireland. But more recently, there have been some notable exceptions. The 'undisputed king of trainers', JD, is now in 50 countries, using a mix of directly owned stores, franchises and joint ventures, including nearly 300 US branches. Primark and Sports Direct have also taken their concepts abroad. True, Greggs is a particularly British brand, catering to British tastes, much more so than those other three selling pricey trainers, cheap clothes and discount sports gear. But perhaps the bigger issue for it is whether its backers are willing to let it try. UK investors have proved reluctant to fund the sort of overseas expansion their American counterparts have happily poured money into. They've much preferred safe, steady but decidedly dull dividend payers. This reluctance holds back the UK market, and has young companies with their eyes on growth running for Wall Street, where shareholders are much more willing to roll the dice, and have been rewarded for doing so. If Greggs is guilty of myopia – and it's easy to make the case with three branches in Thetford – it's hardly alone.
Yahoo
a day ago
- Business
- Yahoo
How to get the best currency exchange deal for your holiday money
There has been a lot of talk about exchange rates recently, especially given how the pound has risen against the dollar and fallen against the strengthening euro since the start of the year. When these things happen, it's tempting to wonder if we should try to time our holiday currency exchange to make the most of it. However, this isn't as straightforward as you might think. It's incredibly difficult to second-guess where the currency market is heading, so you still risk buying at a bad time. If you buy months in advance, you also face leaving money lying around at home, where it's a security risk and it's attracting no interest. You could buy in two tranches, so you hedge your bets and definitely don't exchange it all at the worst possible time, but you need to beware of exchange fees or delivery costs — which will soon eat into any gain. Find the best deal For most people, the most sensible approach is not to try to become a part-time currency trader, but to find the best possible deal at the right time for you. This is usually available from a credit or debit card without fees for overseas spending. You can't choose when the exchange is made with these cards — it will happen at the point you spend, but the better exchange rate may make it worth it anyway. Read more: How to build passive income A quick spot check found that exchanging somewhere highly competitive on the high street would cost you £500 for €570, whereas spending on a fee-free card would cost £495. You don't need to switch current accounts to get a new debit card, you can open a second account just for holiday spending, and transfer cash into it when you need it. Shop around The second most cost-effective approach is to shop around using an online currency comparison tool. You don't need to be within easy reach of a host of foreign exchange bureaux to shop around — you can get it delivered to a supermarket or shop nearby, or if you're ordering a reasonable chunk of money you should be able to get free delivery to your home. Don't buy your currency on a credit card though, because this is treated as a cash withdrawal, so there could be a fee and interest to pay on top. What to avoid By far the most expensive approach to getting cash is to leave it to the last minute and buy at the airport. The same spot check found €570 would set you back £507 — £12 more than a card. If you have no choice other than to do this, use the online service to order in advance — even if you're travelling that day. As long as you do it a few hours in advance, you should get a slightly better deal. Read more: How to make pension pots tax-efficient The other pitfall to watch for is spending on your usual credit card or debit card without checking the charges. You could end up paying around 3% of the transaction amount — plus a flat fee of up to £1.50. Finally, if you opt for a card of any kind, make sure you're paying in the local currency. If a retailer gives you the option of paying in pounds, you can politely decline. If you opt for pounds, you're relying on whatever exchange rate the shop or restaurant sets, which will include a commission for them, so you're much better paying in the local currency and leaving the exchange up to the more: How to start investing with an employee share scheme How your health can affect your pension How to save money on your council tax billError in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
19-07-2025
- Business
- Yahoo
Supermarket bosses attack Reeves's plan for fresh tax raid
Tesco and Sainsbury's have warned Rachel Reeves that plans for a £1.7bn tax raid on big shops would accelerate the decline of the high street. The intervention by the country's two largest supermarkets marks a significant escalation in the backlash against the Chancellor's plans for a shake-up of the business rates system. Retail chiefs fear will Ms Reeves will deal another devastating blow to Britain's struggling town centres. Ken Murphy, boss of Tesco, told The Telegraph that the move threatened 'investments in customers, colleagues and communities'. His comments are likely to fuel fears of fresh price rises, redundancies and another cull of shops as retailers look to offset swinging cost rises introduced by a cash-strapped Labour Government at the last Budget. The reforms will increase business rates for department stores, supermarkets and those with larger premises. Mr Murphy said: 'Increasing the burden on large shops would hinder rather than help our town centres. Many of these shops are anchor stores in their local communities.' Simon Roberts, the Sainsbury's boss, predicted that retail's big beasts would 'pull away from our high streets' as they sought to weather a jump in National Insurance contributions and minimum wage increases. The sector is also concerned about the potential costs of of Angela Rayner's Employment Rights Bill. Mr Roberts said: 'The changes being proposed will further increase the negative impact of business rates and won't stimulate the growth or investment into our high streets and jobs that we all want to see. The Government promised fundamental reform to level the playing field but the changes we are hearing about will not deliver this – they will not stimulate growth or investment.' Opposition is also mounting beyond the big grocers. Alex Baldock, the boss of electricals giant Currys, accused Ms Reeves of 'rushing' changes to the business rates system that will have widespread implications for retailers already grappling with a tsunami of additional government-imposed costs. Jobs at risk Over-burdened retailers are already grappling with 'a perfect storm' of 'extra costs and red tape', which is 'bad for jobs, investment and growth,' he said. 'The mooted hikes in business rates will just make things worse.' Mr Baldock warned that the overhaul would 'shutter more stores' and 'leave more gaps on the high street', as well as harming employment opportunities for young people. Thierry Garnier, the chief executive of B&Q's parent company Kingfisher, warned that the Treasury's latest tax grab would harm 'communities across the UK'. The Chancellor is expected to use her next Budget to ramp up business rates in a desperate attempt to plug a £5bn hole in the public finances created by abrupt about-turns on benefits and winter fuel cuts. As part of efforts to level the playing field, businesses with bigger premises will be charged more in order to reduce the rates paid by smaller stores. The effective discount is intended to target online retailers and save independent firms, ministers contend. Last month, the British Chambers of Commerce warned that tax rises are 'paralysing' British businesses. One in three companies were cutting jobs to weather the £25bn National Insurance raid, it said. 'Larger physical stores, which support more jobs, should not be penalised through a higher multiplier,' Mr Garnier said. Pub bosses protest The hospitality industry is also braced for further pain with pub bosses queueing up to express their disquiet last week. Simon Emeny, the chief executive of Fuller's, said pubs were already labouring under 'a ridiculously disproportionate' £25bn business rates burden. Sir Tim Martin, the boss of JD Wetherspoon, complained that pubs were already having to contend with a 'ferocious tax disadvantage'. The sector maintains it is unfair that pubs pay VAT on food sales while supermarkets do not have to, enabling them to sell alcohol at a discount to pubs. Meanwhile, the Government's own analysis shows that the impact of the planned reforms will be felt far and wide from hotels, restaurants and theatres to cinemas, theme parks and even zoos. At the same time, only a fifth of those are warehouses used by internet retailers. In a speech to prominent City figures attending the Mansion House dinner in London on Tuesday evening, Ms Reeves claimed 'Britain is better off under Labour'. The Treasury was contacted for comment. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Sign in to access your portfolio
Telegraph
19-07-2025
- Business
- Telegraph
Supermarket bosses attack Reeves's plan for fresh tax raid
Tesco and Sainsbury's have warned Rachel Reeves that plans for a £1.7bn tax raid on big shops would accelerate the decline of the high street. The intervention by the country's two largest supermarkets marks a significant escalation in the backlash against the Chancellor's plans for a shake-up of the business rates system. Retail chiefs fear will Ms Reeves will deal another devastating blow to Britain's struggling town centres. Ken Murphy, boss of Tesco, told The Telegraph that the move threatened 'investments in customers, colleagues and communities'. His comments are likely to fuel fears of fresh price rises, redundancies and another cull of shops as retailers look to offset swinging cost rises introduced by a cash-strapped Labour Government at the last Budget. The reforms will increase business rates for department stores, supermarkets and those with larger premises. Mr Murphy said: 'Increasing the burden on large shops would hinder rather than help our town centres. Many of these shops are anchor stores in their local communities.' Simon Roberts, the Sainsbury's boss, predicted that retail's big beasts would 'pull away from our high streets' as they sought to weather a jump in National Insurance contributions and minimum wage increases. The sector is also concerned about the potential costs of of Angela Rayner's Employment Rights Bill. Mr Roberts said: 'The changes being proposed will further increase the negative impact of business rates and won't stimulate the growth or investment into our high streets and jobs that we all want to see. The Government promised fundamental reform to level the playing field but the changes we are hearing about will not deliver this – they will not stimulate growth or investment.' Opposition is also mounting beyond the big grocers. Alex Baldock, the boss of electricals giant Currys, accused Ms Reeves of 'rushing' changes to the business rates system that will have widespread implications for retailers already grappling with a tsunami of additional government-imposed costs. Jobs at risk Over-burdened retailers are already grappling with 'a perfect storm' of 'extra costs and red tape', which is 'bad for jobs, investment and growth,' he said. 'The mooted hikes in business rates will just make things worse.' Mr Baldock warned that the overhaul would 'shutter more stores' and 'leave more gaps on the high street', as well as harming employment opportunities for young people. Thierry Garnier, the chief executive of B&Q's parent company Kingfisher, warned that the Treasury's latest tax grab would harm 'communities across the UK'. The Chancellor is expected to use her next Budget to ramp up business rates in a desperate attempt to plug a £5bn hole in the public finances created by abrupt about-turns on benefits and winter fuel cuts. As part of efforts to level the playing field, businesses with bigger premises will be charged more in order to reduce the rates paid by smaller stores. The effective discount is intended to target online retailers and save independent firms, ministers contend. Last month, the British Chambers of Commerce warned that tax rises are 'paralysing' British businesses. One in three companies were cutting jobs to weather the £25bn National Insurance raid, it said. 'Larger physical stores, which support more jobs, should not be penalised through a higher multiplier,' Mr Garnier said. Pub bosses protest The hospitality industry is also braced for further pain with pub bosses queueing up to express their disquiet last week. Simon Emeny, the chief executive of Fuller's, said pubs were already labouring under 'a ridiculously disproportionate' £25bn business rates burden. Sir Tim Martin, the boss of JD Wetherspoon, complained that pubs were already having to contend with a 'ferocious tax disadvantage '. The sector maintains it is unfair that pubs pay VAT on food sales while supermarkets do not have to, enabling them to sell alcohol at a discount to pubs. Meanwhile, the Government's own analysis shows that the impact of the planned reforms will be felt far and wide from hotels, restaurants and theatres to cinemas, theme parks and even zoos. At the same time, only a fifth of those are warehouses used by internet retailers. In a speech to prominent City figures attending the Mansion House dinner in London on Tuesday evening, Ms Reeves claimed 'Britain is better off under Labour'. A Treasury spokesman said: 'We are a pro-business Government that is creating a fairer business rates system to protect the high street, support investment and level the playing field. 'To deliver our manifesto pledge and provide certainty and support to the high street we intend to introduce permanently lower tax rates for retail, hospitality and leisure properties from next year.'
