Greggs shares fall after chain warns of sluggish economy

Greggs said subdued consumer confidence has left it on track for flat annual profits despite stronger Christmas sales, and its shares fell about 7.3% on the update.

Greggs reported stronger sales over the Christmas period but warned that subdued consumer confidence had placed pressure on profits. The bakery chain said the market remained challenging but that it was on track to meet guidance for 2025. Management pointed to efficiency measures and investments in supply chain capacity that will become operational this year. The company also outlined plans for further shop openings while reducing capital expenditure in coming years. Key points: - Total sales rose 7.4% in the three months to December, taking annual sales to £2.15 billion, 6.8% higher than 2024. - The group said subdued consumer confidence meant it was on track for flat annual profits and expected a modest drop in operating profit compared with 2024's £195 million. - Greggs opened 207 new shops and closed 86 in 2025, leaving 2,739 shops trading at 27 December 2025, and plans around 120 net new shops in 2026. - The company disclosed a £4.5 million VAT accounting error that will reduce reported profit; its shares fell about 7.3% on the update and short interest is reported at around 11–12%. Summary: The update shows resilience in sales alongside pressures on profit margins and investor sentiment, as reflected in the share decline. Management expects to meet its 2025 guidance, to reduce capital expenditure in 2026 and 2027, and to continue expanding the estate at a similar rate. Undetermined at this time.