Greggs (GRG) has long held its place as one of Britain’s most recognizable food-to-go chains, with over 2,600 shops serving millions of customers weekly. Known for its signature sausage rolls, sandwiches, and value-driven menu, the company has steadily evolved from a traditional bakery into a fast-moving, data-informed brand. Its strength lies in convenience, affordability, and a loyal customer base that spans urban workers, students, and families alike.
After a record-breaking 2024, Greggs entered 2025 facing a more complex landscape. Consumer confidence softened, cost pressures persisted, and erratic weather patterns affected footfall, particularly in early winter and late spring. Still, management remained focused on long-term execution, prioritizing estate expansion, product innovation, and digital engagement. The brand’s diversification beyond the high street, including into travel hubs, petrol forecourts, and supermarkets, continues to open new pathways for growth and resilience.
The company’s broader vision is to become the most convenient and inclusive food-on-the-go option in the UK. That means deeper investment in logistics and technology, more accessible store formats, and a push into evening trade and app-based loyalty. Even amid margin pressure and reduced profitability in the first half, Greggs’ fundamentals, strong cash generation, disciplined capital spending, and enduring brand equity, suggest a business still playing the long game.
Financial Story
Greggs’ first-half 2025 results painted a picture of steady progress against a difficult backdrop. Total sales rose 7.0% year-on-year to £1.03 billion, while company-managed shop like-for-like (LFL) sales climbed 2.6%, and franchise system sales were up 4.8%. The brand’s core demand held firm, but heavy snow in January and heatwaves in June reduced foot traffic, compressing short-term momentum. Franchise locations proved more resilient, highlighting the benefits of Greggs’ diversified estate model.
Profitability, however, came under pressure. Operating profit declined 7.1% to £70.4 million, and pre-tax profit fell 14.3% to £63.5 million, reflecting higher costs tied to supply-chain investments, shop refurbishments, and logistics capacity build-out. Cost inflation averaged 5.4% in the half and is expected to reach ~6% for the full year. Management also noted lower finance income as cash was deployed into its capital programme, 2025 being the peak year of investment, with expected capex around £300 million.
Greggs ended the half with a small net debt position of £2.5 million, compared with net cash of £125 million at year-end 2024, driven by capital spending on its new Derby and Kettering facilities. The interim dividend was maintained at 19 pence per share, signaling confidence in the group’s balance sheet flexibility and cash flow profile. Management reaffirmed full-year guidance that operating profit will be modestly below 2024’s level, but emphasized that its multiyear investment cycle remains firmly on track.
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1. Estate Expansion Drives Scale and Reach
Greggs’ estate growth remains the cornerstone of its strategy. The company opened 87 new shops in the first half, with 31 net additions after closures and relocations, taking the total estate to 2,649. Six new drive-thrus were added, including the first in Northern Ireland, and franchise locations continue to perform strongly in non-traditional settings like petrol forecourts and retail parks. Importantly, around 60% of 2024 openings were in areas with no other Greggs within a mile, indicating disciplined expansion rather than cannibalization.
The brand continues to see clear headroom toward its target of more than 3,000 UK shops, with a long-term capacity model supported by major supply-chain investments. Shop relocations and refurbishments (108 completed in H1 2025) are improving efficiency and digital order capabilities, ensuring newer sites can support click-and-collect and delivery integration. These infrastructure upgrades, though costly in the near term, underpin sustainable volume growth and reinforce Greggs’ convenience-led moat.
2. Menu Innovation and Daypart Diversification
Greggs’ strength has always been its ability to evolve without losing its core value positioning. The company’s menu innovation spans traditional breakfast items to protein-led hot meals and an expanding plant-based range. New products such as the Korean BBQ Chicken Flatbread and Red Pepper, Feta & Spinach Bake have helped maintain relevance across changing consumer tastes. Breakfast and lunch combos remain value favorites, while iced drinks and pizza continue to outperform expectations.
Evening trade is now 9.3% of company-managed sales, up from 8.4% a year earlier, making it the fastest-growing daypart. The upcoming “Bitesize Greggs” format, smaller shops for high-traffic areas like train stations, could further increase frequency and accessibility. Meanwhile, delivery sales held steady at 6.8% of company-managed revenue, and loyalty engagement through the Greggs App climbed to 25.7% of transactions. This digital traction is strengthening customer retention and driving incremental spend.
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3. Supply Chain and Technology Investments Set the Stage for Growth
Behind the counter, Greggs is quietly transforming into a logistics powerhouse. Its new Derby frozen manufacturing and logistics facility, now in advanced installation, will begin operations in early 2026, automating cold storage and shop-level picking to improve margins. A second major build, the Kettering National Distribution Centre, is slated for 2027 and will centralize chilled and ambient distribution while adding capacity for roughly 700 additional shops. These investments are designed to support long-term estate expansion without proportional cost growth.
Technology investment is also reshaping efficiency and customer engagement. Greggs has begun migrating to a new SAP platform and is piloting in-shop self-service kiosks, remote temperature monitoring, and AI-assisted support systems. While these initiatives have temporarily elevated operating costs, they should drive measurable productivity gains over the next two years. The company’s focus on automation and predictive analytics will be central to sustaining competitiveness in a margin-squeezed food-to-go market.
The TIKR Takeaway
Greggs’ first half of 2025 underscores the growing pains of an ambitious expansion cycle. Earnings are under pressure, but revenue resilience, franchise strength, and customer loyalty provide a solid foundation. The near-term drag from investment and cost inflation may mask the scale of transformation underway: by 2027, the group’s logistics and digital backbone will be vastly more capable. Execution risk remains, but the long-term trajectory points toward a more efficient, omnichannel brand positioned for steady, compounding growth.
What makes Greggs particularly interesting is its consistency of purpose. Few mid-cap retailers have maintained such a clear strategic focus, expanding access, modernizing operations, and keeping value at the heart of their proposition, while simultaneously overhauling their infrastructure.
Management’s decision to absorb short-term cost pressure rather than slow down its modernization effort suggests a confident view of future demand. If consumer conditions stabilize and energy and ingredient inflation continue to ease, Greggs’ operational leverage could reassert itself faster than expected, setting up 2026 as a potential rebound year for both margins and sentiment.
Should You Buy, Sell, or Hold Greggs’ Stock in 2025?
Greggs remains a classic case of short-term headwinds versus long-term potential. The stock’s steep year-to-date decline reflects macro fatigue and investor impatience with capex-heavy strategies. Yet with a lean balance sheet, strong cash discipline, and a clear path to capacity-driven growth, Greggs offers a compelling recovery setup once inflation stabilizes and new sites come online.
Valuation and earnings momentum may stay muted through 2025, but if management executes on supply-chain automation and estate expansion, Greggs could re-emerge as a steady compounder in 2026 and beyond. For now, it sits in neutral territory, a solid hold for investors willing to look past a transitional year.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!