Greggs Faces Challenging Year Despite Record Sales
Greggs has hit a major milestone, surpassing £2 billion in sales for the first time in its history, driven by strong demand for hot food like pizzas, chicken goujons, and potato wedges. The bakery chain, known for its sausage rolls, saw pre-tax profits rise 8.3% to £203.9 million, allowing it to distribute a record £20.5 million in profit shares to employees. However, despite the success, the company warned of a difficult year ahead, citing cost-of-living pressures and higher operating costs.
Shares in Greggs took a hit, dropping as much as 14% after the company reported a slowdown in sales growth at the start of 2025. Like-for-like sales increased by just 1.7% in the first nine weeks of the year, down from 5% in the previous quarter. Chief Executive Roisin Currie attributed the weak performance to “disruptive” weather conditions in January and ongoing consumer concerns about rising energy, mortgage, and rent costs. "If you look at all of the consumer confidence data points, [it is] currently low," she said.
To counter rising costs, Greggs is expanding its menu and increasing its presence beyond the High Street, opening a net total of 145 new shops in 2024. The company is also pushing into evening sales and digital channels, with one in five customers now using its app. Greggs also introduced new products like canned lattes, chicken pesto flatbreads, and mozzarella & cheddar bites, with the latter winning the 'New Food To Go Award' at the 2024 Sammies.
Despite the company’s growth plans, investors remain cautious. Garry White, Chief Investment Commentator at Charles Stanley, noted that "extra staff costs eating into profits from April" and "subdued consumer confidence" present challenges. However, he acknowledged that Greggs’ affordability and expansion into new sales channels should help support future growth.
Currie remains optimistic, stating, "The brand is in better shape than ever," and reaffirmed Greggs’ goal of doubling sales by 2026. While the short-term outlook is uncertain, the company continues to invest in growth, betting on long-term success.
