Baker chain Greggs saw profits fall in the first half of the year after customers stayed away from its branches during winter storms and the summer heatwaves.
The company known for its sausage rolls and steak bakes revealed pre-tax profits down 14% from £74.1 million to £63.5 million in the six months to end June.
First-half sales were up 7% to £1.03 billion, with company-managed shop like for like sales up 2.6% and franchised shop like for like sales 4.8% higher.
Greggs, which has more than 2600 shops, said the fall in profit “reflected challenging market footfall and the phasing of cost headwinds that have particularly impacted the first half of the year.
“These challenges were compounded by heavy snow and strong winds in January and unusually hot weather in June, which had a material impact on consumer behaviour and lowered like for like sales.”
More than 200 branches in Scotland and Wales were briefly closed during Storm Éowyn in late January when a rare red warning was issued over hurricane force winds and heavy rain and snow.
The costs included £3 million for increased manufacturing, logistics and technology capacity and 108 shop refurbishments, up from 81 in the first half of 2024.
Overall cost inflation was 5.4% with around 6% expected for the year as a whole. Profits for the year are expected to be “modestly below the level achieved in 2024. “
Chief executive Roisin Currie said it had been a “challenging market” during the first half with confidence low and consumers “saving not spending.”
The interim dividend is held at 19p.
Greggs completed 31 net openings during the half year, bringing the total number of shops to 2,649. Product launched included Plenish Ginger Immunity and Turmeric Recovery health shots, fat-free Greek-style yoghurt with Strawberry Compote, and new sandwiches such as Korean BBQ Chicken Flatbread.
Currie said: “After a challenging start to 2025 we remain clear on the strategic opportunities that lie ahead. Through our disciplined estate expansion and focus on innovation, Greggs is evolving its offer further and making the brand more convenient for a wider range of customers.
“The outlook for cost inflation is unchanged and we are making great progress in building the supply chain infrastructure that will support the next phase of growth.”
Zoe Gillespie, wealth manager at RBC Brewin Dolphin, said: “Greggs had warned profits would be lower than the same period last year, as the UK’s good weather stifled demand. This will do little to address fears the UK has hit ‘peak Greggs’, but the company has been through significant challenges before and come through stronger on the other side.
“Sales are still heading in a positive direction, the store estate is expanding, and the commitment to innovation is delivering popular new products. Greggs also has plenty of cash to deploy and drive its investment programme forward. The shares have fallen more than 40% this year off the back of investor concerns, but the underlying business still appears to be in a good position for the long term.”
