What's happened
Greggs reports a slowdown in sales growth amid subdued consumer confidence and rising costs. Despite price hikes, the bakery chain's full-year like-for-like sales increased only 2.4%, and shares fell nearly 8%. The company remains cautious about 2026, citing economic pressures and inflation easing as potential factors.
What's behind the headline?
The recent performance of Greggs highlights the broader economic pressures facing UK retailers. The company's cautious stance reflects a recognition that consumer disposable incomes remain under strain, despite signs of easing inflation. The decision to hold prices steady, despite rising costs, indicates a strategic focus on value and market share rather than immediate profit margins. The decline in shares suggests investor concern over the sustainability of growth in a tough economic environment. The mention of health trends, such as appetite-suppressing medication, shows Greggs' adaptation to changing consumer preferences, which could influence future product development. Overall, Greggs' experience signals that the UK food-to-go sector will need to navigate ongoing economic uncertainty, balancing cost management with consumer demand for value and health-conscious options. The forecast for flat profits and fewer new store openings underscores a cautious approach that may persist into 2026, with the potential for market stabilization if inflation continues to ease.
What the papers say
The Independent reports that Greggs increased prices on some products but has no current plans for further hikes, citing a challenging market and subdued consumer confidence. The company’s shares fell nearly 8% after warning of flat profit expectations for 2026. Meanwhile, The Guardian notes that Greggs' sales growth slowed to 2.9% like-for-like, with total sales up 6.8%, amid a tough economic backdrop and cautious outlook. Both sources agree that inflation easing and consumer pressure are key factors influencing Greggs' strategy, with the company focusing on value and health-conscious options to adapt to changing customer preferences. The Guardian emphasizes the impact of weather and consumer sentiment, while The Independent highlights the company's efforts to mitigate rising costs and maintain market share.
How we got here
Greggs, the UK's largest bakery chain with about 2,740 shops, has experienced a slowdown in sales growth in 2025. The company faced a challenging market with subdued consumer confidence, inflationary pressures, and rising business expenses, prompting cautious outlooks for 2026. Despite this, Greggs outperformed some competitors and increased its market share during the holiday season.
Go deeper
More on these topics
-
Greggs plc is a British bakery chain. It specialises in 'on-the-go' savoury products such as baked goods, sausage rolls, sandwiches and sweet items including doughnuts and vanilla slices. It is headquartered in Newcastle upon Tyne, England. It is listed.
-
Consumer confidence is an economic indicator that measures the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation. If the consumer has confidence in the immediate and near future economy..