Greggs has reported a fairly respectable set of full-year results, growing total sales 6.8% to £2.15 billion in the 52 weeks to 27 December 2025, though profits came under pressure as higher costs and cautious consumer spending took their toll.
Greggs shares fell on Tuesday as the firm said like-for-like sales in company-managed shops rose 2.4%, a notable performance given the broader food-to-go market saw visits decline 3.1% over the same period.
Greggs increased its share of market visits by half a percentage point to 8.6%, cementing its position as the UK’s leading food-to-go brand.
Greggs doesn’t have any issue selling more through its expanding network of stores; the trouble is that it’s costing more to do so.
Dan Lane, Lead Analyst at Robinhood UK, explained that the firm could be in a tricky position if Greggs is forced to hike prices to match cost increases.
“Greggs is the face of the cheap and cheerful pastry pick-me-up, that’s its whole brand identity,” Dan Lane said.
“If today’s margin compression leads to raised prices, it runs the risk of diluting the entire point of its offering. Consumers have baulked at price increases in the past for exactly this reason.”
Underlying operating profit fell 4% to £187.5 million, while underlying pre-tax profit dropped 9.4% to £171.9 million. The squeeze came from increased fixed costs across manufacturing, logistics and technology — investments made to support long-term growth — combined with the operating leverage drag of softer like-for-like volumes.
Lower interest income on cash deposits and higher lease charges as the estate expands added further pressure below the operating line.
The company continues to make efforts in cost management, delivering £13 million of structural savings in 2025 with further plans in the pipeline.
The new distribution centres in Derby and Kettering, which will support capacity for up to 3,500 shops, remain on time and on budget. The group is also revamping its menus with a focus on protein to help attract more health-conscious shoppers.
Greggs opened 121 net new shops in 2025, taking the estate to 2,739, and is targeting a similar pace of around 120 net openings this year. Longer term, the company sees clear runway to significantly more than 3,000 UK locations and is trialling a compact “bitesize Greggs” format for sites where a full-sized unit isn’t feasible.
There was a cautious yet confident tone in the commentary on trading so far this year and on the outlook for the rest of the year. Like-for-like sales in the first nine weeks of 2026 are running at 1.6%, with total sales up 6.3%.
Management expects full-year profits at a similar underlying level to 2025, noting that any improvement will depend on the consumer backdrop picking up. This seems like Greggs are leaving the door open to blaming the consumer backdrop if sales fall more.
Investors may be reassured with a final dividend of 50p per share, maintaining the total ordinary payout at 69p, unchanged from 2024.