Greggs profit growth accelerated in the first half of the year as the British bakery chain expanded its footprint and boosted grocery sales. The company reported a 20% rise in first-half profit on Wednesday, driven largely by new locations and the performance of its retail partners.
Revenue and Channel Growth
Greggs, which has more UK outlets than McDonald’s, said it made pretax profit of £76.0 million ($101 million) in the first half to June 27, on total sales up 7.2% to £1.1 billion.
Like-for-like sales in company managed shops rose 2.1% and were up 1.3% in franchised shops. The group sees strong sales growth in the grocery retailing channel as it further develops partnerships with Iceland Foods and Tesco, Britain’s biggest food retailer. By integrating into these supply chains, the brand makes its products more accessible to customers who might not visit a standalone bakery.
Building the Footprint
The company opened a net 34 new stores in the half, taking the total number of shops to 2,773. Some analysts have suggested Britain may have hit “peak Greggs” after rapid expansion in recent years. Despite this, the group is targeting around 100 to 110 net new shops in 2026 and is also trialling a “bitesize” format and a self-service “Greggs Express” format. Management sees scope for up to 3,500 stores.
During the period, Greggs opened its first international shop for almost two decades at Tenerife South Airport, a popular holiday destination for Britons. This move highlights the chain’s continued push to reach customers beyond its domestic borders.
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The shift toward grocery partnerships and international locations suggests Greggs is trying to capture demand in places where a sit-down restaurant visit isn’t convenient. By placing products in supermarkets and airports, the brand removes some of the friction that comes with a traditional fast-food meal.
Future Outlook and Risks
Analysts are also concerned that the growing popularity of glucagon-like peptide (GLP-1) drugs, such as Mounjaro and Wegovy, is reducing demand from the chain’s most frequent customers for its high-calorie products. This demographic shift presents a long-term challenge to the core business model.
Greggs said its expectations for the full year outcome were unchanged – 2026 underlying pretax profit at a similar level to 2025’s £172 million. The group had already flagged that higher costs from capacity investment was expected to result in second half profit reducing year-on-year.
Despite these headwinds, shares in Greggs have increased 3% over the last year. Investors seem to be betting on the company’s ability to adapt to changing eating habits and market conditions.
