Greggs took a hammering on the markets this week as investors were alarmed at the high street bakery chain’s continued slowdown in sales.
Its share price sank 10% on Tuesday when the group revealed like-for-like sales grew just 1.7% in the first nine weeks of 2025.
The bakery chain blamed earlier bad weather, with February showing a slight improvement to 2.5%.
But it follows six months of slowing performance, with like-for-like sales up 2.5% in the fourth quarter of last year and 5% in the three months prior.
“Greggs is fundamentally a good business, but it has historically been valued at a premium because of its forecast momentum,” said Jonathan Pritchard at Peel Hunt.
Shares are down more than 13% this week and have plunged 36% so far in 2025 as markets worry consumers will continue to shop less at the chain amid rising inflation.
However, on the positive side, revenues topped £2bn for the first time in the year to 28 December, rising by 11.3%, while pre-tax profits gincreased 8.3% to £203.9m.
“It’s great to be able to announce another record performance in 2024 despite a very tough and challenging marketplace driven by strong execution of our strategic plan,” said CEO Roisin Currie.
Although, challenges are set to continue, with inflation putting an even greater strain on volumes. In December, Greggs increased the price of its sausage rolls by 5p to £1.30 although Currie said there were no further price rises on the horizon.
There are also question marks over Greggs’ bid to boost sales in the evening with the high street business expanding its hot food range last year to try draw greater sales after 4pm.
The evening currently accounts for just 9% of Greggs’ income but represented more than a third of the total food-to-go market, said Currie.
This means Greggs must find a way to compete in an already crowded market, according to Russ Mould, investment director at AJ Bell. “Burgers, pizzas and chicken goujons make Greggs more of a direct rival to kebab shops that are ten a penny across the country,” he said.
“Domino’s Pizza is also pushing hard on lunchtime wraps meaning the food-on-the-go market is becoming dangerously crowded.”
Panmure Liberum’s Ben Hunt was more damning. “[Pre-tax profit] is a touch ahead of expectations, but the good news ends here,” he said.
“We believe volumes have deteriorated further since Q4 and progress in strategic initiatives (evening and delivery) look lack-lustre.”
He argued consensus expectations of 3.5% like-for-like sales growth this year would be challenging, suggesting 2% was more reasonable.
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