By James Davey
LONDON (Reuters) -British baker and fast-food chain Greggs reported a further slowdown in underlying sales growth in its latest quarter, blaming July’s hot weather for weaker trading before a recovery in August and September.
Shares in the group, best known for its sausage rolls, steak bakes, vegan alternatives and sweet treats, did, however, rally 7% on Wednesday, paring 2025 losses to 38%, on relief the sales growth decline was not worse and after it retained its full-year forecasts.
Greggs said like-for-like sales at company-managed shops rose 1.5% in its third quarter ended September 27, having been up 2.6% in its first half.
“While unusually high temperatures persisted throughout July, which held back performance during the month, trading improved in August and September in more stable conditions,” it said.
Greggs’ share price decline this year has reflected the slowdown in sales growth, leading some analysts to say that the UK may have hit “peak Greggs” due to its extensive store network – a claim the company rejects.
“The market will be relieved the update did not bring a downgrade, but the pressure is still to the downside of forecasts,” said analysts at Peel Hunt.
Greggs has opened a net 57 stores so far this year, bringing its total to 2,675. It now expects to add around 120 net new stores in 2025, down from a previous forecast of 140 to 150.
CEO Roisin Currie said the shortfall reflected “timing factors” rather than a deliberate strategy to slow openings.
“We still remain very confident on that strong pipeline of shop growth, it simply is a matter of timing,” she told Reuters.
Greggs is targeting “significantly more” than 3,000 shops over the longer term and ultimately sees scope for more than 4,500.
Currie said Greggs’ growth is also being supported by the expansion of its menu, longer opening hours into the evening, increased delivery sales through the Just Eat and Uber Eats platforms and loyalty building through the Greggs App.
The company maintained its forecast for a “modest” decline in 2025 profit, with a slightly improved outlook for cost inflation.
Currie said Greggs would raise prices on some products this week.
While official data showed British shoppers spent more in August, retailers remain cautious due to speculation over potential tax increases ahead of the government’s budget on November 26 and a weakening jobs market.
(Reporting by James Davey, Editing by Paul Sandle, Jamie Freed and Louise Heavens)
