Greggs H1 2025 sales up 7% as operating profit falls 7.1%

GREGGS PLC (LON:GRG) has announced its interim results for the 26 weeks ended 28 June 2025.

Continued strategic progress, focused on becoming more convenient to more customers

First half financial highlights

·    Total first-half sales up 7.0%, with company-managed shop LFL* sales up 2.6% and franchised shop LFL* sales up 4.8%

·    First half impacted by challenging market footfall, more weather disruption than in 2024, and phasing of cost headwinds

·    Interest income reduced as a result of cash deployment into investment programme

·    Operating profit down 7.1% to £70.4 million, profit before tax down 14.3% to £63.5 million

·    Interim dividend of 19.0p pence per share declared (2024: 19.0p)

* Like-for-like (LFL) company-managed / franchise shop sales performance against 2024 comparable period, where shops have a calendar year’s trading history (excluding any shops which opened, relocated or closed in the current or prior year)

Operational and strategic progress

Growing and developing the Greggs estate:

·    Continued expansion of footprint beyond traditional high street locations to provide more convenient access to Greggs and reach more customers

·    Opened 87 new shops in the first half with 56 closures (including 27 relocations), resulting in 31 net openings, growing the estate to 2,649 shops trading as at 28 June 2025

·    Analysis of shop performance and App customer behaviour demonstrates that increasing convenient access to Greggs, as customers go about their busy lives, drives greater purchase frequency across new and core shops

·    Strong pipeline of good opportunities that are expected to deliver on our return on investment targets – remain on track to achieve 140 to 150 net new shop openings in 2025 (openings are typically weighted to the second half)

·    Continue to see clear opportunity for significantly more than 3,000 UK shops over longer term.

Innovation:

·    In September 2025, we will extend availability of our frozen ‘Bake at Home’ range through a new relationship with Tesco. This builds on our years of success with Iceland Foods, which remains an important partner to Greggs

·    Ongoing menu development supporting growth across all dayparts and channels:

o  Healthier choice range seeing good momentum, supported by successful launches including Plenish Ginger Immunity and Turmeric Recovery health shots, fat-free Greek-style yoghurt with Strawberry Compote, as well as new sandwiches such as our Korean BBQ Chicken Flatbread

o  Breakfast and lunch deals remain highly competitive and are great value customer favourites, offering quality and affordable choices

o  Strong performance in key growth areas such as pizza and iced drinks, where new flavours, expanded availability and compelling value are helping us meet customer needs throughout the day

·    Progress continues in the evening daypart and new channels:

o  Evening remains our fastest growing daypart, up to 9.3% of company-managed shop sales (H1 2024: 8.4%), driven by strong demand in higher-footfall locations

o  Sales through delivery channels represented 6.8% of company-managed shop sales in the first half (H1 2024: 6.7%)

o  The Greggs App was scanned in 25.7% of company-managed shop transactions (H1 2024: 18.3%), with customers who engage with the App shopping more frequently than previously

·    Greggs remains the UK’s leading food-to-go brand (Source: YouGov Brand Index, June 2025) with a sector-leading reputation for value.

Supply chain investment:

·    New frozen manufacturing and logistics site in Derby is now built. Work is progressing to install the stock management and picking automation, along with the first production line.  The site is expected to be operational in the first half of 2026

·    Initial build phase for our new National Distribution Centre in Kettering is progressing well. This site, expected to be operational in the first half of 2027, will support our existing Radial Distribution Centres to service circa 700 additional shops through the automated upstream picking of chilled and ambient goods.

“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. The Board’s expectations for the full year are consistent with the guidance provided in our last trading update on 2 July.”