Greggs has recorded its worst sales growth since the pandemic, when it was forced to shut stores, amid poor weather at the start of 2025 and evidence shoppers are cutting back on snacks.
Shares in Greggs slid nearly 12% on Tuesday as the company reported that sales growth at established stores had softened to 1.7% in the nine weeks since late December. The figure represents a further slowdown after the pace of growth more than halved to 2.5% in the previous quarter.
The UK’s biggest bakery chain blamed “challenging weather conditions” in January and said it was confident it could manage inflationary headwinds this year.
Roisin Currie, the chief executive, said snow and ice in the north of England and red storm warnings, which led to the closure of 250 stores including in Scotland and Northern Ireland, had hit sales.
However, she added there was also likely to be a link between the sales slowdown and consumer confidence as, despite real wage growth in the UK, consumers “appear to be saving rather than spending”.
Greggs’ update came as research by analysts at Kantar showed shoppers have been cutting back on snacks. Its report suggested that Britons had a snack on 330m fewer occasions in 2024 than in 2020 – almost 14% down.
Kantar said the change was because of households wanting to eat more healthily, but it was difficult to untangle concerns about the cost of living and behaviour changes since the pandemic from the figures.
Currie said Greggs shoppers continued to buy snacks and its new flapjacks, for example, were selling well. The chain is, however, introducing more healthy options, such as fruit pots and salads, because of demand from shoppers.
She added that she was hopeful that consumer confidence would increase in April when many households would benefit from the rise in the minimum wage.
Currie said Greggs, which has more than 2,500 shops, was “extremely confident about long-term growth” as it was selling more food in the evening, a time of day where it was not previously strong, and expected to ultimately have more than 3,000 outlets.
The slowdown came after Greggs increased the price of its top-selling sausage rolls in January and shoppers have been reining in spending amid concerns about the economy and global political upheaval.
In January, Currie defended the decision to increase the price of its sausage rolls and some other items by 5p, saying it had to pass on the rising cost of its wage bill, after two-thirds of Greggs’s workers were handed a 6.1% pay rise in January.
Currie said: “In 2021, we set our sights on doubling sales by 2026 and having a significantly bigger business over the longer term. Three years into this five-year plan, sales are on track and we continue to be confident in the growth opportunity in front of us.”
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Despite the recent problems, Greggs is to hand 80% of its 33,000 workers a record £20.5m profit bonus after ringing up more than £2bn of annual sales for the first time.
The company said it was making the payout after its pre-tax profits were up 8.3% to almost £204m in the year to 28 December, helped by an 11.3% rise in sales.
Julie Palmer, a partner at the advisory company Begbies Traynor, said Greggs’s momentum was slowing as fewer people were visiting high streets and it was getting tough to find locations for new outlets.
“The company’s value proposition remains strong, but it faces an uphill battle if it’s going to maintain margins when the increase to the national living wage and employers’ national insurance contributions will see costs leap by 6% this year,” she said.
Food inflation remained steady at 3.3% last month, Kantar’s figures showed, after several months of rising levels amid higher costs on some commodities including cocoa, coffee and dairy as well as increasing wage bills for food producers and retailers.
Supermarket sales rose at 3.2%, slightly behind inflation. Marks & Spencer was the fastest growing physical supermarket, followed by Lidl, and Asda was the only big chain where sales fell back – by 5%.
Source: theguardian.com
