ii view: Greggs battles stiff headwinds
Shares in this value focused food-on-the-go retailer are down by close to a fifth over the last year. We assess prospects.
27th March 2026 11:17
by Keith Bowman from interactive investor
Full-year results to 31 December
- Revenue up 6.8% to £2.15 billion
- Underlying profit down 9.4% to £171.9 million
- Final dividend of 50p per share
- Total 2025 dividend payment unchanged at 69p per share
- Net cash held of £45.8 million, down from £125 million at the end of 2024
Guidance:
- Continues to expect little change in annual profits in 2026
Chief executive Roisin Currie said:
"Greggs delivered a resilient performance in 2025, growing market share, alongside continued strategic progress.
“We remain focused on broadening access to Greggs with a strong pipeline of shop openings, exciting launches and deeper customer engagement via the Greggs App.
“We have a clear formula for long-term success, leveraging our value leadership, vertical integration, breadth of range and strong track record of innovation. Together, these strengths give us a clear competitive advantage and position us well to deliver further sustainable growth."
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ii round-up:
Greggs (LSE:GRG) is a UK food-on-the-go manufacturer, distributor and retailer of items including bakery products, sandwiches and drinks.
Store numbers totalled 2,739 as of late December with most outlets company managed and around a fifth run on a franchised basis.
For a round-up of these latest results announced on 3 March, please click here.
ii view:
Started in 1939 and headquartered in Newcastle, Greggs today employs over 30,000 people. The FTSE 250 company, whose outlets now include drive-thru stores, began a transformation from bakery to food-on-the-go retailer in 2013. Products are today predominantly made in centralised bakeries and distributed. Company strategy includes an expansion of digital sales such as click & collect and delivery via Just Eat Takeaway.com NV (EURONEXT:TKWY) and Uber Eats. Competitors include Marks & Spencer Group (LSE:MKS) and McDonald's Corp (NYSE:MCD).
For investors, as well as management estimates for broadly unchanged profits in 2026, they must now consider a likely rise in energy costs for the company given war in the Middle East. Other existing cost headwinds have included raised employee taxes as well as spend on expanding and improving the group’s supply chain. The risk that weight-loss drugs possibly reduce some consumer demand is not to be forgotten. Extremes of weather have previously impacted customer demand, while Greggs' geographical exposure is limited to just the UK.
More favourably, numbers provided by Greggs suggest there is growth in market share, with ongoing product innovation likely contributing. Management is focused on eventually running 3,000 or more stores, increased delivery sales and selling group products at other retailers such as Tesco (LSE:TSCO). Group capital expenditure is expected by management to ease during 2026, while £13 million of costs was cut in 2025, £4 million ahead of target.
For now, and while Greggs is a well-run business with long-term potential and a 4.5% dividend yield, risks clearly remain, which may be enough to keep fresh money on the sidelines for now.
Positives:
- Value product offering
- Several growth initiatives
Negatives:
- Uncertainty economic outlook
- Lacks geographical diversity
The average rating of stock market analysts:
Strong hold
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