Greggs store expansion slows as cost pressures and sales falter

Greggs has scaled back its ambitious plans for new store openings this year as waning sales ignite concerns over a marked slowdown for the high street baker. The British chain, which had been expanding at a rapid clip, now aims to add just 120 new locations in 2025—twenty fewer than previously targeted and below its average of 145 annual openings. The group now operates a total of 2675 outlets across the UK.

The reduction comes amid what Greggs describes as challenging trading conditions. A combination of rising living costs and new National Insurance contribution rules introduced by the Labour government have put additional strain on profitability. The group faces a £20 million increase in costs due to these tax changes—an unexpected financial hit that prompted chief executive Roisin Currie to highlight the difficulties in business planning under such volatility.

To counterbalance these headwinds, Greggs is raising prices on several marquee products. For example, its breakfast meal deal climbs to £4.15 from £3.95 beginning this Friday. While input cost inflation has eased slightly, persistent pressure on household finances continues to weigh on customer demand, with Currie acknowledging that many customers remain squeezed.

The bakery giant, once a shining star on the high street, is confronting fears that it may have reached peak Greggs. Momentum has faltered, with a nearly 40 percent slump in shares so far this year. Greggs has also become one of the most shorted stocks in the market, with major hedge funds, including Blackrock and Millennium, betting on further declines.

This summer’s heatwave dealt another blow as sales cooled sharply in July, dragging shares down by more than 14 percent after the announcement. The rising influence of weight loss medication has also dented demand for traditional staples like sausage rolls, slicing £10 million off profits earlier in the year. Currie confirmed shifting consumer behaviour, noting that meal injections are changing both what and how people eat. Greggs plans to respond by launching smaller portions and more protein-rich alternatives to enhance its relevance for these consumers.

In a bid to boost appeal throughout the trading day, the company is expanding its sandwich and toastie range, with a pulled pork sandwich among the latest additions. Sales in the most recent quarter rose 6.1 percent through to the end of September, offering some encouragement for the business. Even so, sentiment remains fragile, and navigating the ongoing economic challenges will require careful adaptation from the bakery chain’s leadership team.