The British high street has been dealt another major blow this morning after one of its recent success stories – and a brand beloved by millions – announced a judge drop in profits.
Sausage roll titans Greggs reported the disappointing financial results on Tuesday, attributing it to warm weather and consumers’ financial caution.
The head of the popular high street bakery chain revealed that customers up and down the country are now “saving rather than spending” due to ongoing strain on their household budgets.
The Newcastle-based firm disclosed a 14.3% drop in pre-tax profits to £63.5 million for the half-year ending June 28, compared to the same period last year.
The company cited “challenging market footfall, more weather disruption than in 2024” and rising costs as factors impacting the first half of 2025.
Earlier this month, Greggs informed shareholders that the heatwave in June had dampened demand for its hot food offerings.
On Tuesday, the group added that severe snow and strong winds in January also took a toll.
Roisin Currie, chief executive of Greggs, told the PA news agency that the high street has faced “challenging” conditions this year.
She said: “If you look at all the consumer confidence data, it remains low and points to cautious and fragile customers,”.
“They are saving rather than spending and that means they aren’t out and about on the high street as much.
“Customers are worried about their finances and being very careful about their spending, but we do think Greggs is in a positive position because of our strong value offer.”
Despite these challenges, the retail business reported a 7% sales growth to £1.03 billion for the half-year, bolstered by new store openings.
Greggs has reported a tasty 2.6% rise in like-for-like sales at its company-managed shops, with an even more appetising 4.8% growth at franchise locations.
Ms Currie expressed confidence that Greggs has the potential to grow its presence to “significantly more than 3,000” outlets across the UK.
The past half-year saw Greggs roll out 87 new stores while closing 56, bringing their total to 2,649 shops as of the end of June.
Greggs is on course for 140 to 150 net new shop openings this year, with a flurry of store launches expected in the latter half of 2025.
Ms Currie remarked: “After a challenging start to 2025 we remain clear on the strategic opportunities that lie ahead.”
She continued: “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.”
She also noted: “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.”
Market analyst Mark Crouch from EToro observed: “Greggs has long been a reliable read on the UK high street.”
He added: “Its sudden stumble suggests consumers may not just be cooling on sausage rolls, but that appetite across the high street may be waning more broadly.”
Crouch also pointed out: “With inflation easing and real wages recovering, the macro backdrop should, in theory, be supportive. That it isn’t showing up in Greggs’ numbers is a red flag.”
In early Tuesday trading, Greggs shares dipped by 2.2%.