Greggs, the beloved British bakery chain, has reported a significant drop in profits, attributing the downturn to challenging market conditions and an increase in the popularity of weight-loss medications. Despite the tough landscape, CEO Roisin Currie remains optimistic, forecasting that easing inflation rates may rejuvenate consumer spending in the near future.
Profit Decline and Market Pressures
For the year ending 27 December, Greggs experienced a 17.9% decrease in statutory pre-tax profits, amounting to £167.4 million. This decline is reflective of a difficult economic environment, characterised by rising living costs and increased taxes. The company noted that while total sales surged by 6.8% to £2.15 billion, the overall sentiment among consumers remains cautious.
Currie expressed concerns about consumer confidence, stating, “When you look at disposable income, you can see that the backdrop is still tough out there.” This sentiment resonates with many households grappling with financial strains, which have influenced their purchasing habits. The growing adoption of weight-loss treatments has further complicated the landscape, putting additional pressure on the fast-food sector.
Easing Inflation and Future Outlook
However, there are signs of hope on the horizon. Currie highlighted potential “green shoots” that may indicate a shift in consumer behaviour as inflationary pressures begin to ease. She noted that the cost inflation rate has dropped from nearly 6% last year to approximately 3%, suggesting that the worst may be behind us.
“Easing inflationary pressures should provide some support to consumer spending, and demand for convenient food-on-the-go continues to underpin the market,” Currie remarked. This optimism is vital, especially as Greggs continues to expand its store footprint, with a net addition of 121 locations in 2025, bringing its total to 2,739 shops across the UK.
Continued Expansion and Resilience
Greggs has demonstrated resilience amid adversity, maintaining its commitment to growth despite the challenges. The company plans to open around 120 new stores this year and aims to exceed 3,000 locations in the long term. The expansion strategy is complemented by the growth of its delivery service and increased evening trade, which have both contributed to the overall sales increase.
In the first nine weeks of 2026, Greggs reported a 1.6% rise in like-for-like sales across its managed outlets, with total sales climbing by 6.3%, largely driven by the success of recent store openings.
Why it Matters
The challenges faced by Greggs are emblematic of broader trends affecting the retail and food sectors in the UK. As inflation impacts disposable incomes and shifts consumer behaviour, businesses must adapt to survive. Greggs’ proactive approach to expansion and innovation in service delivery could serve as a blueprint for resilience in a rapidly changing market. As consumers navigate their financial realities, the response of companies like Greggs will be crucial in determining their future success and the overall health of the high street.
