UK's Greggs profit jumps on store expansion and supermarket growth
Greggs Reports Strong First-Half Performance and Future Expansion Plans
By James Davey
LONDON, July 29 (Reuters) - Greggs, Britain's biggest fast-food chain, reported a 20% rise in first-half profit on Wednesday, as it opened more stores and sold more products in supermarkets, sending its shares sharply higher.
The group, best known for its sausage rolls, steak and chicken bakes, vegan alternatives and sweet treats, 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.
Its shares rose 12%.
Supermarket Partnerships Drive Sales
Greggs said it saw strong sales growth in the grocery retailing channel as it further developed partnerships with Tesco, Britain's biggest food retailer, and Iceland Foods.
Store Performance and Weather Impact
Hot Weather Slowed Sales Growth
In its own stores, like-for-like sales rose 2.1%, though growth did slow in the final seven weeks of the period as a prolonged spell of hot weather reduced demand for snacks.
"Physiologically when the temperature's above 30 (degrees Celsius) you know that the customer just eats less," Greggs CEO Roisin Currie told Reuters.
Adapting to Weather Conditions
She said Greggs was more resilient in the hot weather this year compared to 2025, introducing more salads and iced drinks.
Store Expansion and Market Concerns
Greggs, which has more UK outlets than McDonald's, opened a net 34 new stores in the first six months of the year, taking the total to 2,773.
Analyst Views on Growth
Some analysts have suggested Britain may have hit "peak Greggs" after rapid expansion in recent years.
Analysts are also concerned that the growing popularity of weight-loss drugs, such as Mounjaro and Wegovy, is reducing demand from the chain's most frequent customers for its high-calorie products.
Future Expansion Plans
However, Greggs is targeting 100 to 110 net new shops in 2026 and is also trialling "bitesize" and "Express" self-service outlets. It sees scope for up to 3,500 stores.
International Expansion Efforts
Currie said the group's latest attempt at overseas expansion — a store at Tenerife South Airport in Spain's Canary Islands — had got off to a promising start.
Outlook and Financial Expectations
Greggs said its expectations for the full-year outcome were unchanged, with underlying pretax profit seen at a similar level to last year's £172 million.
It had already flagged that higher costs from capacity investment were expected to result in second-half profit reducing year-on-year.
($1 = 0.7519 pounds)
(Reporting by James Davey; Editing by Kate Holton, Sarah Young and Tomasz Janowski)
