In a challenging economic landscape, Greggs, the beloved British bakery chain, reported a significant drop in profits for the previous year, attributing the downturn to an array of factors including the rising popularity of weight-loss medications among consumers. However, CEO Roisin Currie expresses optimism for 2026, suggesting that easing inflation might rejuvenate consumer spending.
Profit Performance and Economic Challenges
Greggs announced a 17.9 per cent decline in statutory pre-tax profits for the year ending 27 December, totalling £167.4 million. This slump stems from persistent economic pressures and a particularly hot summer that dampened high street foot traffic. The company, known for its iconic sausage rolls and steak bakes, has been navigating a tough retail environment marked by rising costs and shifting consumer behaviours.
Despite these challenges, the firm reported total sales growth of 6.8 per cent, reaching £2.15 billion, bolstered by a strong store opening strategy and a boost in evening trade. Greggs expanded its footprint by opening 121 new locations in 2025, bringing its total to 2,739 shops across the UK. Currie highlighted the need to adapt to the current climate, stating, “We have come into 2026 planning for another challenging year.”
Consumer Sentiment and Future Outlook
The ongoing cost-of-living crisis, combined with higher taxation and labour costs, has made consumers more cautious about their spending. Currie noted that while customer confidence remains fragile, there are signs of potential recovery. “Looking into 2026, easing inflationary pressures should provide some support to consumer spending and demand for convenient food-on-the-go continues to underpin the market,” she remarked.
In the first nine weeks of 2026, like-for-like sales across managed shops grew by 1.6 per cent, with overall sales climbing 6.3 per cent due to the continued expansion of its stores. The company remains committed to its ambitious strategy, aiming for over 3,000 locations in the long term.
Adapting to Market Trends
The increasing adoption of weight-loss drugs poses a unique challenge for Greggs, as it impacts consumer choices and dietary habits. As more individuals opt for medical interventions to manage their weight, traditional fast-food outlets like Greggs may need to rethink their offerings. Currie acknowledged this shift, indicating that the company is prepared to adjust its product range to meet the evolving preferences of health-conscious consumers.
Furthermore, Greggs’ expansion into delivery services has been a key growth driver, allowing it to tap into new market segments and cater to the changing demands of busy customers. The bakery’s ability to innovate and adapt will be pivotal as it navigates these turbulent economic waters.
Why it Matters
Greggs’ current predicament underscores the broader challenges facing retailers in a post-pandemic economy, where shifting consumer behaviours and rising costs create a precarious balance. As the company strives to recover from profit declines, its strategies will be closely watched by industry stakeholders. The outcome of Greggs’ efforts to enhance consumer confidence and adapt to market trends will not only determine its own future but also reflect the resilience of the high street as a whole.
