UK's Greggs first-half profit up 20% as grocery business grows
Greggs Reports Strong First-Half Performance and Expansion
Profit Growth Driven by Store Expansion and Grocery Retail
LONDON, July 29 (Reuters) - Greggs, Britain's biggest fast-food chain, reported a 20% rise in first-half profit on Wednesday, driven by store expansion and growth in its grocery retail business.
The group, best known for its sausage rolls, steak and chicken bakes, vegan alternatives and sweet treats, said it made pretax profit of £76.0 million ($101 million) in its first half to June 27, on total sales up 7.2% to £1.1 billion.
Sales Performance Across Shop Types
Like-for-like sales in company managed shops rose 2.1% and were up 1.3% in franchised shops.
Grocery Retail Channel Growth
Greggs said it saw strong sales growth in the grocery retailing channel as it further developed partnerships with Iceland Foods and Tesco, Britain's biggest food retailer.
Store Expansion and New Formats
New Store Openings
Greggs, which has more UK outlets than McDonald's, opened a net 34 new stores in the half, taking the total to 2,773.
Future Expansion Plans
Some analysts have suggested Britain may have hit "peak Greggs" after rapid expansion in recent years. However, the group is targeting around 100 to 110 net new shops in 2026 and is also trialling a "bitesize" format and a self-service "Greggs Express" format. It sees scope for up to 3,500 stores.
International Expansion
During the period, Greggs opened its first international shop for almost two decades at Tenerife South Airport, a popular holiday destination for Britons.
Challenges and Market Concerns
Impact of GLP-1 Drugs on Sales
Analysts are also concerned that the growing popularity of glucagon-like peptide (GLP-1) drugs, such as Mounjaro and Wegovy, is reducing demand from the chain's most frequent customers for its high-calorie products.
Profit Outlook and Cost Pressures
Greggs said its expectations for the full year outcome were unchanged - 2026 underlying pretax profit at a similar level to 2025's £172 million.
The group had already flagged that higher costs from capacity investment was expected to result in second half profit reducing year-on-year.
Share Performance and Additional Information
Shares in Greggs have increased 3% over the last year.
($1 = 0.7519 pounds)
(Reporting by James Davey; Editing by Kate Holton and Sarah Young)