Thanks to poor weather during the beginning of 2025 and a perceptible shift in customers’ purchase habits, Greggs has revealed its slowest sales increase since the pandemic. Following the revelation that like-for-like sales had risen only 1.7% in the nine weeks since late December, the UK’s largest bakery business watched its shares drop by nearly 12% on Tuesday. Expansion had already declined to 2.5% in the last quarter, and this is an even bigger slowdown.
The business put some of the decline down to poor weather, especially in January, when snow and ice hit northern England. Red storm warnings caused 250 shops to close temporarily, including those in Scotland and Northern Ireland. Greggs is nevertheless optimistic about weathering inflationary pressures this year.
Chief Executive Roisin Currie recognized that consumer confidence could also be behind the sales slump. Despite UK wage growth in real terms, many consumers have been saving rather than spending. Her words are supported by research from analysts at Kantar, who discovered that Brits reduced snacking levels dramatically in 2024, eating 330 million fewer portions of snacks versus 2020—equating to a drop of nearly 14%.
According to Kantar, health consciousness has contributed to this trend, though the impact of rising living costs and post-pandemic lifestyle changes cannot be overlooked. However, Currie emphasized that Greggs’ snack sales remain strong, with newer offerings such as flapjacks proving popular. In response to evolving consumer preferences, the company has expanded its healthier product range to include fruit pots and salads.
Looking forward, Currie hopes that consumer spending might pick up in April when a rise in the minimum wage should help many families. Despite the recent slowdown, Greggs is sticking with its long-term growth strategy. The business currently has over 2,500 outlets and has big plans to move beyond 3,000 stores. One of the main areas of growth has been in its evening range, where it has experienced rising demand—a area where the brand has traditionally underachieved.
The sales growth decline coincided with Greggs’ price rise in January, which saw its best-selling sausage rolls rise by 5p. The move followed the company experiencing increasing costs, especially of wages. Two-thirds of Greggs’ employees received a 6.1% wage hike at the beginning of the year, forcing the company to raise some of these costs from consumers.
Currie supported the price hikes, pointing out that they were required to ensure financial health while still investing in employees and business expansion. She reiterated Greggs’ overall vision, “In 2021, we set our sights on doubling sales by 2026 and having a much larger business in the longer term. Three years into this five-year plan, sales are on track, and we remain optimistic about our growth opportunity ahead.”
In spite of recent setbacks, Greggs is in a sound financial position. The firm will pay a record £20.5 million profit-sharing bonus to 80% of its 33,000 staff after making more than £2 billion of annual sales for the first time. Pre-tax profits increased by 8.3% to almost £204 million in the year to 28 December, driven by an 11.3% growth in total sales.
But some analysts warn that Greggs will be challenged to maintain its momentum. Julie Palmer, a Begbies Traynor partner, said that falling high street footfall and the challenge of finding prime locations for new stores could be obstacles. She added, “The value proposition of the company is still robust, but it has a battle on its hands to hold margins when the hike to the national living wage and employers’ national insurance contributions will make costs jump by 6% this year.”
At the same time, food inflation has held at 3.3%, Kantar reported. This comes after a spell of rising costs fueled by higher prices for foods like cocoa, coffee, and dairy, coupled with rising wage costs for producers and retailers of food. Sales in supermarkets rose by 3.2%, just behind inflation. Of the large supermarket groups, Marks & Spencer was the strongest performer, followed by Lidl, with Asda the only large retailer to experience a fall, down by 5%.
In spite of recent losses, Greggs’ management is upbeat about the future of the company. The company believes it is well-placed for long-term success by continuing to evolve with changing consumer trends and expanding its presence in untapped market areas.