Greggs: Shares crater as sweltering June set to hit profit

Greggs has said it expects to report lower annual profit than last year as scorching temperatures in June impacted sales.

The company told markets this morning that total sales in the first half of the year grew 6.9 per cent to £1.3bn, although like-for-like sales grew just 2.6 per cent.

Shares fell by more than 13 per cent in early trades.

The sausage roll maker said its improved performance had failed to continue into June as “very high temperatures” reduced overall footfall, despite an uptick in cold drinks sales.

England reported its hottest June ever last month, with temperatures averaging 16.9C. The UK as a whole saw its second warmest June since records began in 1884.

Greggs expects full year operating profit to be “modestly” below last year’s, with higher costs compounding the slower sales growth.

It has invested significant amounts in refurbishments and new stores, opening  87 new shops in 2025 and confident in achieving  140 to 150 net openings for the full year.

Refurbishment activity has been “biased to the first half of 2025”, Greggs said, with 108 refits so far and around 50 more planned.

Greggs ‘feeling the heat’

Analysts have previously warned on Greggs slowing growth rate, arguing that its strategic initiatives, too, look lacklustre despite recent growth.

Panmure Liberum analysts rates the bakery a ‘sell’ and downgraded its profit before tax forecast by eight per cent.

“We… continue to argue that deteriorating volumes and market share momentum are concerning.”

“Strategic initiatives such as evening trading and delivery continue to show limited traction, while rising cannibalisation risks mean that delivering the required, sustained volume growth required to offset elevated cost headwinds will be challenging,” analysts said.

It has been making a push into the late-night trade recently, with selected stores open past 4pm and some open until 2am, as well as expanding its menu range.

Mark Crouch, market analyst for eToro, said: “Greggs might be feeling the heat, but not in the way it hoped. The bakery chain this morning blamed the recent hot weather for softer sales in its latest trading update.

“For a brand that’s built its success on affordability and convenience, a dip in demand raises eyebrows, especially when footfall should be strong. Sure, it’s harder to sell a hot sausage roll in a heatwave, but a stretched consumer may be part of the bigger picture,” Crouch added.

The high street bakery flagged the impact of cost inflation and higher wage taxes earlier in the year, which controversially pushed the company to increase the price of its flagship sausage roll in January, although said its cost inflation outlook for 2025 remains unchanged.

Greggs’ share price has taken a hit this year in light of its slower sales, down nearly thirty per cent in the year to date and 37 per cent since last August.