Greggs plots steady expansion despite profit dip and volatile weather

Greggs chief executive Roisin Currie has stressed the company’s ambitions to expand beyond 3000 UK stores, despite a significant fall in pre-tax profit and the impact of unpredictable weather on consumer behaviour. The well-known high street baker, currently operating 2649 outlets, faces analyst concerns that domestic growth may be approaching its natural limits. However, Currie maintains that considerable untapped potential remains, particularly in locations such as transport hubs, roadside stops, supermarkets and retail parks.

Recent trading figures provide a mixed picture. In the six months ending June, pre-tax profit fell by nearly 17 per cent to £63.5 million. Greggs attributes this decline to erratic weather patterns, ranging from severe snow in January to an intense June heatwave, both of which disrupted normal purchasing habits. This volatility has led management to lower profit expectations for the year, with operating profit now forecast to fall modestly below the £195.3 million recorded in 2024.

Revenue in the first half still advanced, reaching £1.03 billion. Like-for-like sales at company-managed shops rose 2.6 per cent, while franchise-operated shops outperformed with 4.8 per cent growth on a comparable basis. Currie also noted that newer Greggs shops are outperforming the established estate, reinforcing the company’s disciplined approach to selecting expansion sites.

Greggs opened 31 net new shops during the period and remains on track for 140 to 150 net new openings this year. Currie underlined that growth is pursued selectively, with the focus on areas currently underserved by the Greggs brand. There are many regions across the UK lacking a Greggs presence, indicating the runway for growth is far from exhausted.

Despite operational progress, the market remains cautious. Greggs shares have lost more than 40 per cent of their value since the beginning of the year. The latest results saw shares drop a further 2.9 per cent to £15.97 by mid-afternoon. Nevertheless, management is confident that pursuing measured expansion in strategic locations will underpin long-term performance, even as current trading faces headwinds.