Greggs has recorded its worst sales growth since the pandemic, when it was forced to shut stores, amid poor weather at the start of 2025 and evidence shoppers are cutting back on snacks.
Shares in Greggs slid more than 10% in early trading as the company reported that sales growth at established stores had softened to 1.7% in the nine weeks since late December, a further slowdown after the pace of growth more than halved to 2.5% in the previous quarter.
The company blamed “challenging weather conditions” in January for the slowdown and said it was confident it could manage inflationary headwinds this year.
However, it increased the price of its top-selling sausage rolls in January and shoppers have been reining in spending amid concerns about the economy and global political upheaval.
Shoppers have also been cutting back on snacks, according to the latest monthly report on supermarket sales by Kantar, suggesting that Britons had a snack on 330m fewer occasions in 2024 than in 2020.
Kantar said food inflation remained steady at 3.3% last month after several months of rising levels amid higher costs on some commodities including cocoa, coffee and dairy as well as increasing wage bills for food producers and retailers.
In January, Roisin Currie, the chief executive of Greggs, defended the decision to increase the price of its sausage rolls and some other items by 5p, saying it had to pass on the rising cost of its wage bill, after two-thirds of Greggs’s workers were handed a 6.1% pay rise in January.
Currie said: “In 2021, we set our sights on doubling sales by 2026 and having a significantly bigger business over the longer term. Three years into this five-year plan, sales are on track and we continue to be confident in the growth opportunity in front of us.”
Despite the recent problems, Greggs is to hand 80% of its 33,000 workers a record £20.5m profit bonus after ringing up more than £2bn of annual sales for the first time despite slowing demand in recent months.
after newsletter promotion
The UK’s biggest bakery chain said it was making the payout after its pre-tax profits were up 8.3% to almost £204m in the year to 28 December, helped by an 11.3% rise in sales.
However Julie Palmer, a partner at the advisory company Begbies Traynor, said Greggs’s momentum was slowing as fewer people were visiting high streets and it was getting tough to find locations for new outlets.
“The company’s value proposition remains strong, but it faces an uphill battle if it’s going to maintain margins when the increase to the national living wage and employer’s national insurance contributions will see costs leap by 6% this year,” she said.
Article by:Source: Sarah Butler
