Greggs Q3 2025 trading update: Heatwave slows sales but bakery giant holds its full-year outlook

Greggs plc (LON: GRG) reported that its sales momentum moderated during the third quarter of 2025, as an unusually hot July kept customers away from its signature baked goods. Yet, the United Kingdom’s leading food-on-the-go retailer maintained its full-year guidance, citing improved trading through August and September, better cost visibility, and ongoing store expansion supported by new supply-chain investments.

The stock of Greggs plc closed at 1,669.00 GBX on October 3, 2025, up 0.91 percent from the previous session, suggesting that investors took comfort in the company’s reaffirmed outlook despite modest quarterly figures.

How did Greggs plc perform during the third quarter of 2025 and what drove its sales trend?

For the 13 weeks ended 27 September 2025, Greggs recorded total sales growth of 6.1 percent, while company-managed like-for-like sales rose 1.5 percent compared with the same period last year. Year-to-date, total sales climbed 6.7 percent, with like-for-like growth of 2.2 percent.

Management attributed the weaker July performance to extreme summer temperatures that reduced demand for hot snacks, traditionally Greggs’ strongest product category. As weather conditions normalized in August and September, the chain recovered lost ground, with trading volumes returning to seasonal averages.

The company continued to emphasize affordability in a cost-of-living-strained UK market. Its “Big Deal” meal offer, priced from £5 and combining any sandwich or salad with a drink and side, has become a traffic driver across urban commuter locations.

How is Greggs plc evolving its product range and in-store experience to sustain customer loyalty?

Greggs’ third-quarter update placed significant emphasis on menu innovation and value-based meal options. To capture growing demand for high-protein and on-the-go nutrition, the retailer rolled out Egg Pots and Protein Shakes nationwide. New sourdough toasties and an upgraded sandwich range were designed to appeal across breakfast and lunch occasions.

A Pulled Pork Sandwich trial, initially tested in select markets, has now expanded to 350 shops after early success. The company also reintroduced its Vegan Lattice (Steak-Free) option, catering to flexitarian consumers seeking meat-alternative snacks. Seasonal autumn additions such as the Pumpkin Spice Latte, Pumpkin Spice Doughnut, and Toffee Fudge Muffin targeted festive impulse purchases and social-media-driven interest.

The retail bakery chain has also deepened its partnership with British supermarkets, strengthening its “Bake at Home” business line. Following its long-running collaboration with Iceland Foods, Greggs’ frozen range is now available in 930 Iceland stores and 820 Tesco outlets across the UK as well as online. This dual-channel strategy expands brand reach beyond the high street and supports revenue diversification amid shifting consumer habits.

What progress has Greggs plc made in store expansion and supply-chain infrastructure during 2025?

Greggs’ estate continued to grow steadily through the third quarter. As of 27 September 2025, the bakery operator managed 2,675 shops, including 2,096 company-owned and 579 franchised units. Year-to-date, the company opened 130 new stores and closed 73, including 39 relocations, resulting in a net addition of 57 shops.

While Greggs slightly trimmed its projection for net openings in 2025 to about 120 new locations, the pipeline for 2026 remains strong. The retailer is prioritizing supermarket concessions and retail-park sites in collaboration with Tesco PLC and Sainsbury’s Supermarkets Ltd., as these formats provide higher throughput and extended trading hours.

The group’s supply-chain upgrade program is also advancing on schedule. Construction of a new frozen-product manufacturing and logistics hub in Derby is progressing well, with automation testing underway and commissioning planned for 2026. Meanwhile, the Kettering National Distribution Centre, dedicated to chilled and ambient goods, is nearing completion, with fit-out works expected to begin shortly and full operations targeted for 2027.

These long-term investments are designed to underpin capacity expansion and improve cost efficiency, setting up Greggs for its next decade of growth.

How are inflation, consumer trends, and pricing shaping Greggs plc’s financial outlook for the rest of FY 2025?

The retail environment for quick-service food operators in the UK remains challenging. High energy prices, wage increases, and raw-material inflation have squeezed margins across the sector. However, Greggs’ management noted a “marginally improved outlook for cost inflation” through the remainder of 2025, particularly in packaging and logistics.

The company’s decision to keep its full-year guidance unchanged was viewed positively by institutional investors, signaling confidence in its pricing discipline and cost control. Some sell-side analysts observed that Greggs’ menu pricing remains competitive versus peers such as Pret A Manger and Costa Coffee, allowing it to defend market share among value-conscious customers.

Greggs continues to walk a fine line between affordability and profitability. The firm’s strategy focuses on maintaining price leadership while incrementally offsetting cost increases through operational efficiency, automation, and product innovation.

How have Greggs plc shares performed, and what is the sentiment among institutional investors?

At the start of October 2025, Greggs shares were trading around 1,669 GBX, roughly 15 points higher on the day and up nearly 3 percent from their late-September lows. The stock, however, remains below its early-2024 peak above 2,700 GBX, reflecting investors’ cautious stance on consumer-discretionary exposure.

Institutional sentiment has improved slightly following the reaffirmed guidance. Many long-only funds appear to be maintaining “hold” positions, viewing Greggs as a defensive consumer brand with predictable cash flows and moderate dividend yields.

Short-term speculative interest has declined as macro risks persist, but long-term confidence in the brand remains high. Fund managers point to Greggs’ vertically integrated supply chain and disciplined capital allocation as reasons for its resilience even in weaker trading cycles.

What challenges and opportunities could shape Greggs plc’s growth trajectory heading into 2026?

Analysts expect the upcoming winter and early-2026 trading periods to be decisive. Cold weather typically boosts Greggs’ sales mix toward its high-margin hot items such as sausage rolls, steak bakes, and hot drinks. A normalization of temperatures after July’s heatwave could therefore support sequential improvement in like-for-like growth.

Meanwhile, the successful rollout of frozen and chilled products via supermarkets may open up new income streams. Greggs’ venture into grocery retail aligns with broader shifts in British consumer behavior, where hybrid purchasing—alternating between dine-in, takeaway, and retail channels—has become the norm.

The company’s move to develop its own distribution hubs signals confidence in long-term demand. Analysts believe these facilities could improve gross margin by 40–60 basis points once fully operational. If inflation continues to ease through 2026, Greggs may regain earnings momentum and potentially revisit its dividend expansion plans.

However, competition is intensifying. Supermarket cafés, high-street rivals, and emerging healthy-snack brands are all competing for wallet share. Greggs’ continued success will depend on balancing menu innovation with its value positioning—a delicate act that has historically defined its brand identity.

Can Greggs plc’s autumn recovery translate into sustained growth momentum or fade as a temporary seasonal uplift in UK retail performance?

Greggs plc’s third-quarter performance underscores the resilience of a value-driven business navigating macroeconomic headwinds. The modest like-for-like uptick of 1.5 percent is hardly stellar, but the company’s ability to maintain its outlook and sustain store expansion demonstrates strategic stability.

For investors, the story hinges less on quarterly fluctuations and more on the execution of its 2026 supply-chain strategy and grocery retail partnerships. The rollout of Derby and Kettering facilities, coupled with high-margin product extensions, could set the stage for a more efficient, multi-channel growth model.

While the market remains cautious amid cost-of-living pressures, Greggs’ reputation for affordability and consistency continues to differentiate it from premium-priced peers. In the near term, the upcoming winter season will test whether sales recovery is structural or merely weather-related.

If cost inflation continues to soften and demand stabilizes, the bakery chain could re-enter an earnings expansion phase by late 2026. For now, institutional sentiment sits firmly in the “steady but watchful” camp—supportive of Greggs’ fundamentals but aware that its next leg of growth depends on flawless operational execution.