Shares in Greggs took a tumble on Thursday morning after “disappointing” sales growth from a subdued economy left investors with little to cheer for.
The chain’s total sales in the golden quarter rose 7.4 per cent as it opened 207 new shops in the last 12 months leading to a net gain of 121 new sites.
But on sales at company-managed sites – which excludes the ‘new’ money from the 207 stores – performance was far more subdued growing just 2.9 per cent.
Greggs’ stock slumped over three per cent in early trading to 1,718p. The baker is also UK’s most shorted-stock with short interest sitting at approximately 11 per cent to 12 per cent indicating investors are betting the firm has hit ‘peak sausage roll.’
A warning was handed to shareholders as Greggs said market conditions “remain challenging”.
Roisin Currie, chief executive of Greggs, said: “We made good progress in 2025, in a challenging year where subdued consumer confidence impacted the food-to-go market.”
Greggs said it anticipates reporting a full-year pre-tax profit in line with previous expectations, which follows previous predictions it would be “modestly below” 2024’s £204m.
This will come before Greggs digests the impact of a £4.5m accounting error in how they calculated VAT, which will take a hefty chunk out of the baker’s bottom line.
Greggs feels brunt of dim consumer spending
Jonathan Pritchard, analyst at Peel Hunt, said Greggs had a “difficult year” and the final months were “also tricky”.
He added whilst sales growth was “mildly disappointing” it had to be placed in the context of the tough consumer backdrop.
“Certainly pre-Budget the consumer was in no mood to be frivolous, and Christmas does not appear to have been overly joyous either,” Pritchard said.
Still, Greggs managed to finish the year with total sales 6.8 per cent higher at £2.2m.
The Newcastle-headquartered firm said its cost reduction strategy had delivered £13m in efficiencies in 2025, allowing it to “maintain attractive pricing”.
In the fourth quarter of 2025 data from S&P Global showed consumer confidence was knocked to a two-year low amid concerns around the Budget.
The combination of tax fears ahead of Rachel Reeves’ November Budget, as well as the impact of policies announced dampening spenders’ sentiment has hit the highstreet.
Black Friday discounts failed to entice shoppers amid the Budget uncertainty with figures from the Office of National Statistics showing sales declined 0.1 per cent in November.
Greggs also pointed to “weather extremes” as hitting the food-to-go market.
In the first of 2025, Greggs shuttered more than 50 sites after reporting a “challenging start” to the year.