First half sales at high street bakers Greggs have passed £1bn but operating profits have fallen.
New interim results for the North East-based food-on-the-go firm show sales of £1.02bn in the 26 weeks to June 28, up from £960.6m in the same period of 2024, amid continued expansion of its store network. But the sausage roll seller said poor footfall and cost headwinds hampered operating profits, which were down to £70.4m, from £75.8m in the same period last year.
As well as additional costs from its expanded manufacturing and distribution operations, the FTSE250 retailer said overall cost inflation for the first half had been 5.4%, with 6% expected for the whole year. The chain has opened 87 new shops during the period with 56 closures, and 27 relocations.
Shares in the firm have fallen since it revealed earlier this month that hot weather in June had impacted sales, in addition to difficulties caused by heavy snow and wind in January. But bosses are continuing with growth plans including investment into supply chain capacity, including a new Derby site modelled on its Balliol Business Park facility on Tyneside, and a national distribution centre in Kettering that will serve an additional 700 shops.
Greggs said it remains convinced of the opportunity for 3,500 shops across the country, with its eyes on retail parks, railway stations, airports, roadsides and supermarkets. It also said analysis of shop performance and orders via its app, showed that increasing convenient access to Greggs drove more regular purchases.
A new “bitesize Greggs” format is to be trailed in the second half of the year. With a focus on railway stations and retail parks, the retailer will launch small outlets with a more limited range of products, in spaces where there is not room for a full-service shop.
A new deal with Tesco will see its frozen ‘bake at home’ range sold by the supermarket giant from September, following its success with Iceland. Meanwhile recent additions to its in-store menu include ‘plenish ginger immunity and turmeric recovery health shots, fat-free Greek-style yoghurt with strawberry compote and new sandwiches such as Korean BBQ chicken flatbread.
With pizza and iced drinks among the chain’s key growth products, evening sales continued to be the fastest growing part of the day and accounting for up to 9.3% of company-managed shop sales thanks to strong demand in high footfall locations. Delivery sales were 6.8% of company-managed shop sales in the first half.
Chief executive Roisin Currie said executives expect full year operating profit to be modestly below 2024 but said the Ƶ had absolutely not reached “peak Greggs” following media speculation. Speaking to journalists following the results, she said there are still many areas of the country where you cannot access one of its stores.
She said: “After a challenging start to 2025 we remain clear on the strategic opportunities that lie ahead. Through our disciplined estate expansion and focus on innovation, Greggs is evolving its offer further and making the brand more convenient for a wider range of customers.
“The outlook for cost inflation is unchanged and we are making great progress in building the supply chain infrastructure that will support the next phase of growth. The board’s expectations for the full year are consistent with the guidance provided in our last trading update on July 2.”
