What's happened
Greggs reports a 17.9% drop in pre-tax profits to £167.4 million for 2025, citing challenging market conditions, hot weather, and rising costs. Despite slower sales growth at the start of 2026, the company expects easing inflation to support consumer spending and plans to expand its store network.
What's behind the headline?
Greggs' recent financial results highlight the resilience of its business model despite economic headwinds. The 17.9% profit decline reflects external pressures such as hot weather reducing foot traffic and inflationary costs. However, the company's strategic expansion—adding 121 stores in 2025 and targeting over 3,000 locations long-term—positions it for future growth. The emphasis on diversifying sales through delivery and evening hours indicates a shift to adapt to changing consumer habits. While some analysts remain cautious, expecting subdued growth, Greggs' focus on expanding accessibility and menu adaptation should bolster its market share. The anticipated easing of inflation this year is likely to improve consumer confidence, but ongoing challenges like tax changes and slow economic growth will require continued agility.
What the papers say
The Independent and The Guardian provide contrasting perspectives on Greggs' outlook. The Independent emphasizes the company's resilience and cautious optimism, highlighting Roisin Currie's comments on easing inflation supporting consumer demand. The Guardian, meanwhile, underscores the profit slump and external pressures, noting analyst skepticism about the company's long-term prospects. Both sources agree that weather and economic headwinds have impacted recent performance, but differ on the outlook—The Independent more optimistic about future growth, The Guardian more cautious about ongoing challenges.
How we got here
Greggs, a leading UK bakery chain, has faced pressures from rising living costs, higher taxes, and increased labor expenses over the past year. The company has responded by expanding its store footprint and diversifying sales channels, including delivery and evening trade. Recent weather conditions and economic headwinds have impacted footfall and sales growth, prompting cautious outlooks for 2026.
Go deeper
- How will Greggs' store expansion impact its long-term profitability?
- What role will inflation and consumer confidence play in Greggs' 2026 performance?
- How are changing eating habits, like appetite-suppressing medications, affecting Greggs?
Common question
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Why Did Greggs' Profits Fall in 2025?
In 2025, Greggs experienced a notable drop in profits despite overall sales growth. Many wonder what caused this decline and what it means for the future of this popular UK bakery chain. Below, we explore the key reasons behind the profit fall, the current challenges facing UK businesses, and what Greggs' outlook for 2026 looks like.
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