High street bakery chain Greggs has warned that its full-year profits are expected to fall below last year’s levels, after a surge in June temperatures sharply reduced footfall and dampened demand for its core baked goods.
Shares in the FTSE 250 company tumbled more than 13% on Wednesday morning following the announcement, as investors reacted to the disappointing sales performance and cautious profit outlook.
In a trading update, Greggs reported total sales of £1.3 billion for the first half of 2025, up 6.9% year-on-year. Like-for-like sales in company-managed shops rose by just 2.6%. However, the company admitted that momentum weakened considerably in June, when record-breaking heat saw customer numbers decline.
“Very high temperatures reduced overall footfall, leading to a modest shortfall in sales relative to our plan,” the company said, noting that although cold drink sales saw a boost, it wasn’t enough to offset the drop in demand for baked items.
June was the hottest on record for England, with average temperatures reaching 16.9°C — the second highest ever recorded in the UK since 1884.
As a result of the slower sales and ongoing cost pressures, Greggs now expects operating profit for the year to be “modestly” lower than in 2024. The company pointed to a combination of rising wage costs, increased refurbishment spending, and higher employer national insurance contributions as factors squeezing margins.
Despite the headwinds, Greggs is continuing to invest in its growth strategy, having opened 87 new shops so far this year. It remains on track to deliver between 140 and 150 net store openings by the end of 2025. The company has also completed 108 store refurbishments, with an additional 50 scheduled before year-end.
However, analysts remain cautious. Panmure Liberum maintained its ‘sell’ rating on the stock and lowered its profit forecast by 8%, warning of sluggish sales and limited impact from newer strategic initiatives such as extended evening trading hours and delivery services.
“Strategic moves such as evening trading and delivery continue to show limited momentum,” analysts said, adding that increasing store density could lead to “cannibalisation” of existing sales.
Greggs has been trialling late-night hours at selected locations — some open until 2am — in a bid to attract new customers beyond its traditional breakfast and lunch base.
Commenting on the update, eToro analyst Mark Crouch remarked: “Greggs may be feeling the heat, but not in the way it hoped. It’s harder to sell a hot sausage roll in a heatwave, but a stretched consumer may be part of the bigger picture.”
Greggs’ share price has now fallen nearly 30% year-to-date and is down 37% from its August 2023 peak, reflecting growing concern over slowing growth and persistent inflationary pressures. The company confirmed that its cost inflation outlook for the remainder of 2025 remains unchanged.
