29-07-2025
Greggs first-half profits drop as heatwave hits sales
Consumers' lack of appetite for Greggs' sausage rolls and steak bakes during June's heatwave caused profits at Britain's biggest bakery chain to fall sharply in the first half of the year.
Greggs, which is based in Newcastle upon Tyne, told shareholders this morning that pre-tax profit had dropped to £63.5 million for the six months to the end of June, down from £74.1 million in the same period a year earlier, as the company was hit by hot weather kept shoppers away from its stores.
At the start of July, the FTSE 250 firm warned that the 'volatile weather conditions' seen in recent weeks, which had impacted customer purchasing patterns, had forced management to re-evaluate its forecasts.
Greggs expects this year's operating profit 'could be modestly below' the £195.3 million achieved in 2024.
Roisin Currie, chief executive, said: 'After a challenging start to 2025 we remain clear on the strategic opportunities that lie ahead.'
However, her confidence failed to reassure investors as Greggs shares, which have lost more than 46 per cent of their value since the start of the year, fell a further 6 per cent to £15.48, down 97p.
As disclosed in its recent trading update, like-for-like sales at company-managed shops grew 2.6 per cent in the first half, lifting revenues to £1.03 billion, while its franchise-operated shops delivered like-for-like growth of 4.8 per cent. Sales growth was supported by the expansion of Greggs' menu, longer opening hours into the evening, increased delivery sales through Just Eat and Uber Eats and building loyalty with the Greggs app.
Greggs was founded as a delivery business on Tyneside by John Gregg, who opened his first shop in Gosforth in 1951. His sons, Ian and Colin, expanded the business around the country and floated it in 1984. The business now has about 33,000 employees and has grown its portfolio to 2,649 stores.
In the first half, it opened 31 new shops on a net basis — those opened minus those closed, and said it remains on track to achieve between 140 and 150 net new shop openings this year.
Slowing sales growth at Greggs has sparked concerns that the chain may be approaching the limits of its domestic growth model, leading analysts to question whether the company can keep up the pace of store openings.
Currie, who succeeded Roger Whiteside as chief executive in 2022, stood by Greggs' long-term store growth plan, saying there remains a 'clear opportunity for significantly more than 3,000 UK shops.'
