Cost increases and declining volumes amidst a challenging food-to-go market have caused Greggs profits to fall.
In its Q4 trading update published around the start of the year, the bakery chain reported total sales had risen 6.8% to reach £2.2bn as its estate growth continued at pace. It added 121 net new openings in 2025 to bring it up to 2,739 shops.
However, this morning’s preliminary results for the 52 weeks ended 27 December 2025 revealed underlying pre-tax profit had fallen by 9.4% to £171.9m, compared to £189.8m in 2024. Throughout last year, volumes were under pressure from reduced consumer spending impacting the wider food-to-go market, noted Greggs.
The underlying profit margin also decreased from 9.7% to 8.7%, as Greggs contended with rising costs of labour, food, and packaging. The profit position also reflected challenging market conditions, it said, compounded by the spell of particularly hot weather that had a material impact on footfall and consumer behaviour.
Greggs is expecting like-for-like costs to be less inflationary in 2026 – employment cost inflation will again be the biggest driver of higher expenses but at a lower level than seen in recent years thanks to changes to the National Living Wage.
Structural cost savings of £13m were delivered by Greggs teams in 2025, £4m ahead of its stretch target, with cost management remaining a focus going forward.
Following a record £287.5m of capital investment last year, the company is ready to roll out upstream robotic picking of frozen goods from mid-2026 at its new National Distribution Centre in Derby. This is on track to become fully operational by the end of the year including a first production line to help add capacity.
Its other new distribution site in Kettering, which will also embrace automation to enable upstream picking of chilled and ambient goods, is to go online in 2027 and support a network of up to 3,500 shops in the medium term. Capex is expected to be around £200m this year, reducing to a range of £150m to £170m annually from 2027 onwards.
Greggs confirmed a strong pipeline of new shop openings in 2026, primarily in new catchments that drive strong returns. However, a rainy start to the year has seen a slowdown in like-for-like sales growth, down to 1.6% for the first nine weeks of 2026 (it posted 2.9% growth for Q4 FY25). Meanwhile, total revenue has increased 6.3% over the latest period this year.
The business highlighted to its resilience against the backdrop of a tough environment for the whole food-to-go market in 2025. It said it had increased its share of food-to-go visits by 0.5 percentage points to 8.6%, including gains across all dayparts, compared to a market where visits shrank 3.1% [Circana data, 12 months ended December 2025].
It is now anticipating to deliver full-year profits at a similar underlying level to 2025, with any year-on-year improvement contingent on a recovery in the consumer backdrop. “We have a clear formula for long-term success, leveraging our value leadership, vertical integration, breadth of range and strong track record of innovation,” commented Greggs CEO Roisin Currie. “Together, these strengths give us a clear competitive advantage and position us well to deliver further sustainable growth.”
Currie previously recognised the demand for smaller portions due to the increase in GLP-1 weight loss medication, with Greggs looking to broaden its choice for customers looking for quick, healthy, high protein and fibre options.
However, its latest menu addition launching on Thursday (5 March) leans into springtime sweet treat indulgence and builds on its existing range of hot desserts including yum yums, chocolate brownies, and milk chocolate cookies. The new Hot Cinnamon Yum Yums (rsp: from £3.50, serves two) features doughnut pieces covered in sugar glaze and topped with a lightly spiced cinnamon dusting. They come with a choice of milk chocolate or salted caramel flavour dipping.
Greggs has also sweetened up its drinks menu with new Caramelised Biscuit Latte (£2.85) and Iced Caramelised Biscuit Latte (£3.35).
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