Greggs profit flakes as baker faces lukewarm start to year
Profit at Greggs is flaking away as the chain bakery faces a lukewarm 2026, with sales slowing already this year.
The chain’s underlying profit before tax fell nine per cent to £171.9m in the financial year to December 2025, though total sales were up seven per cent, the bakery’s preliminary results show.
The baker is one of the UK’s most popular on-the-go food chains, famed for its sausage rolls, but investors have grown increasingly sceptical of the brand’s persistent growth, leaving Greggs as the country’s most shorted company.
Sales at the Newcastle-based sausage roll maker slowed at the start of this year, with growth at company-managed shops at only 1.6 per cent for the first nine weeks of 2026, significantly down on 6.3 per cent total year-on-year growth.
Greggs is aiming to continue its aggressive expansion with 120 new stores this year, after it saw 121 net openings in 2025.
The chain said it is confident that new stores do not eat away at the sales of existing ones, instead claiming Brits increase their overall attendance at Greggs stores if they start using a new site.
The bakery is attempting to diversify as well as expand its classic stores, with last year seeing it launch a new bake at home Tesco range and pilot ‘bitesize Greggs’ outlets in small spaces.
Though bolstered by the enduring appeal of its sausage rolls and steak bakes, the brand is not immune to new trends – even releasing launching an iced matcha latte last year after the drink went viral.
But Robinhood UK analyst Dan Lane said this distancing from the bakery’s core appeal raises alarm bells: “Greggs needs to make sure it doesn’t sacrifice its beloved, and reassuringly simple, brand by trying to be all things to all people and losing its purpose.”
He added: “Concentrating on fitting out new stores at the expense of overlooking current like-for-like sales is a potential problem – the company needs to reassure its customers and shareholders that this isn’t the case.”
Investors bet against the sausage roll boom
Greggs has long been the FTSE’s most shorted company and has faced even more funds betting against its growth in recent weeks, with short interest rising to 14.38 per cent this month.
Shares in the chain, which is FTSE 250 listed, tumbled by more than seven per cent in one day in January after Greggs handed shareholders a warning it is facing “challenging” economic conditions.
The bakery’s share price has fallen by more than 25 per cent over the last year and currently stands at 1,558p.
Roisin Currie, chief executive of Greggs, said: “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.
“We have a clear formula for long-term success, leveraging our value leadership, vertical integration, breadth of range and strong track record of innovation.”