By James Davey
LONDON (Reuters) -British bakery and fast-food chain Greggs reported a further slowdown in underlying sales growth in its latest quarter, blaming July’s hot weather for weaker trading before a recovery in August and September.
The company, best known for its sausage rolls, steak bakes, vegan alternatives and sweet treats, said like-for-like sales at company-managed shops rose 1.5% in its third quarter ended September 27, having been up 2.6% in its first half.
“While unusually high temperatures persisted throughout July, which held back performance during the month, trading improved in August and September in more stable conditions,” Greggs said on Wednesday.
Shares in Greggs have lost nearly half their value over the last year after sales growth slowed, prompting some analysts to declare the UK had hit “peak Greggs”, given its large number of stores in Britain, a charge the company denies.
So far this year, the group has had 57 net new openings, taking total store numbers to 2,675.
It now expects to add around 120 net new stores in 2025, below its previous estimate of 140 to 150, which it said reflected “the timing of opportunities”.
It is targeting “significantly more” than 3,000 shops over the longer term and ultimately sees scope for more than 4,500.
Greggs said its expectations for full-year earnings were unchanged, with a marginally improved outlook for cost inflation in 2025.
In July, the group warned that full-year profit “could be modestly below” 2024 levels.
“Greggs continues to make progress despite challenging market conditions,” the company said.
While official data showed British shoppers spent more in August, retailers are uneasy about how trading could be impacted by tax-rise speculation in the run-up to the government’s budget on November 26 and a weakening jobs market.
(Reporting by James Davey, Editing by Paul Sandle and Jamie Freed)
