Bakery chain Greggs says full year operating profits could fall below last year after slower sales growth in June due to hot weather changing customer habits.
The Newcastle-based food-on-the-go firm said total first half sales were up 6.9% to £1.027bn in the 26 weeks to June 28, as like-for-like sales were up 2.6%. An improved sales performance in the first part of May continued through the month but hot weather in June impacted sales with increased demand for cold drinks but footfall down overall.
Despite the headwinds, Greggs continued shop openings with 87 new sites launched and 56 closed during the period, giving a total of 2,649 shops trading - including 2,085 company-managed shops and 564 franchised units. Bosses said they remain confident of making between 140-150 net openings in 2025.
Meanwhile there were 108 refurbishments of shops in the first half, with about 50 more planned for the second half of the year.
In a previous update towards the end of last month, Greggs said product innovation had been supporting sales. That includes over-ice drinks in peach iced tea and mint lemonade flavours; hot food options such as southern fried chicken goujons and southern fried potato wedges, and a newly launched mac and cheese dish, which had enjoyed exposure on social media channel TikTok.
At the time, bosses referred to a "challenging market context" but said an investment strategy - including construction of a new frozen product manufacturing and logistics facility in Derby and a national distribution base in Kettering - was on track.
In its new update to investors on the London Stock Exchange, ahead of 2025 interim results, Greggs said: "The board expects first half operating profit to be lower than H1 2024, reflecting the stronger comparative trading performance in H1 2024 and the phasing of refurbishments and cost recovery initiatives across the current year. For the full year, our cost inflation outlook remains unchanged and planned cost mitigation measures are expected to enhance second half performance.
"Whilst acknowledging that comparative LFL sales are less demanding in the second half of the year, in light of the current trading conditions the board now anticipates that the full year operating profit could be modestly below that achieved in 2024."