Greggs profit fall 20.3% as heat dents footfall

The group expects employment cost inflation to be the biggest driver for 2026.

Greggs reported a profit after tax of £122.2m for the financial year 2025, a 20.3% drop from £153.4m in the previous year, according to its latest financial report.

Underlying operating profit was £187.5m in 2025, down 4% compared to the year before, whilst underlying profit before tax fell to £171.9m from £189.8m.

The group said the year-on-year profit position reflected challenging market conditions, compounded by the spell of particularly hot weather that had a material impact on footfall and consumer behaviour. Profit before tax included the one-off impact of accounting for £4.5m related to previous years’ VAT costs.

The net exceptional gain of £14.1m in 2024 is primarily related to the sale of a legacy supply chain site.

The business experienced overall like-for-like cost inflation of around 5.5% in 2025. This was primarily driven by employment costs, including the impact of the increase in employers’ National Insurance contributions from April 2025, and rising costs of food and packaging.

Greggs also said that energy costs marginally increased, and their shop occupancy cost ratio was stable. It expects like-for-like costs to be less inflationary in 2026, with overall input cost inflation of around 3%.

The group expects employment cost inflation to be the biggest driver of higher costs, but at a lower level than seen in recent years, reflecting changes to the National Living Wage.

“Subdued consumer confidence impacted trading, but the company’s growth strategy remains intact, with work progressing to develop additional income streams and accelerate cost efficiencies. This, along with the leveraging of new logistics capacity, will support the medium-term plan to restore returns in line with our historic targets,” Richard Hutton, chief financial officer at Greggs said.