Has Greggs Reached Its Peak? A Look at the Bakery Chain's Recent Challenges
Is the beloved Greggs bakery chain facing a downturn? With profits slumping and sales slowing, the company is navigating a tricky market. But here's where it gets controversial: some are questioning if the UK has indeed hit 'peak Greggs'.
Greggs, known for its iconic sausage rolls and steak bakes, reported a significant drop in pre-tax profits for the year ending December 27th. Statutory profits fell by a notable 17.9%, landing at £167.4 million compared to the previous year. And this is the part most people miss: the new year started with a slowdown in sales growth, adding to the concerns.
The past year has been challenging for Greggs, with cautious shoppers impacted by rising living costs, higher taxes, and increased labour expenses. Additionally, the growing popularity of weight-loss treatments has affected sales. Despite these challenges, Greggs' CEO, Roisin Currie, remains optimistic. Last year, she confidently stated, "I absolutely don't believe we have reached peak Greggs." She highlighted the company's resilience, having bounced back from previous downturns.
On Tuesday, Greggs acknowledged the easing of inflationary pressures, which they hope will boost consumer spending. However, with signs of grocery inflation on the rise and the potential impact of conflict in the Middle East, the road ahead is uncertain. The retail business, employing over 33,000 people, emphasizes its resilience in the face of a challenging market.
"The profit position year-on-year reflects the difficult market conditions we faced, exacerbated by a period of exceptionally hot weather that significantly impacted footfall and consumer behavior," the company stated.
Currie suggests that some of the challenges Greggs faced in 2025 may ease in the current year. She predicts, "Looking ahead to 2026, we expect easing inflationary pressures to support consumer spending, and the demand for convenient food on the go continues to drive the market."
Greggs attributes the drop in profits to the tough market conditions and the impact of hot weather on high street footfall. Despite this, the company reported total sales growth of 6.8% to £2.15 billion over the year, with like-for-like growth supported by its ongoing store opening program.
In 2025, Greggs opened a net of 121 new stores, expanding its shop estate to 2,739 locations by year-end. The bakery chain aims to open around 120 more stores this year, with ambitions to grow to "significantly more than 3,000 UK shops" in the long term.
Sales growth was further bolstered by the expansion of its delivery business and an increase in evening trade. Like-for-like sales across managed shops grew by 1.6% in the first nine weeks of 2026, with total sales up 6.3% due to store openings.
Analysts are divided on Greggs' long-term prospects. Darren Shirley, an analyst at Shore Capital, believes there's "little to shout about as trading slows." However, Aarin Chiekrie, an equity analyst at Hargreaves Lansdown, offers a more optimistic view: "Despite the challenges, Greggs is actively building the foundations for future growth. The number of shops is set to increase to around 3,000 over the next few years, making Greggs more accessible to a wider audience. Menus are being adapted to changing customer preferences, and shops are staying open later to tap into the group's fastest-growing day-part - the evening trade. In fact, nearly 75% of its stores are now open beyond 5 pm."
So, is Greggs facing a temporary slowdown or a more significant shift in consumer preferences? What do you think? Share your thoughts in the comments - we'd love to hear your take on this bakery chain's future!
