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.
Weather disrupts hot food demand
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.
Customers prioritise saving over spending
"They are saving rather than spending and that means they aren't out and about on the high street as much," Currie explained. "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.
Expansion plans remain ambitious
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. Currie added: "After a challenging start to 2025 we remain clear on the strategic opportunities that lie ahead."
CEO outlines growth strategy
"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," she said. "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."
Analyst warns of broader concerns
"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," Crouch added. Greggs shares were 2.2% lower in early trading on Tuesday.
(PA) Note: This article has been edited with the help of Artificial Intelligence.
