Shares in Greggs jumped over 6% on Wednesday after the British bakery chain reported stronger sales and issued a “modestly improved” outlook for 2026.
The company said total sales rose 7.7% in the 13 weeks to September 26 from the same period a year earlier, with trading gaining momentum through the quarter.
Greggs said its performance benefited from new product launches and “more settled weather” during August and September, helping it navigate continued pressure on consumer finances and challenging conditions across the retail sector.
The company now expects a “modestly improved” outcome for 2026.
It had previously indicated that underlying pretax profit would be broadly similar to the £172 million recorded last year.
Production closures to deliver savings
Alongside the sales update, Greggs said it had begun a consultation over the proposed closure of four manufacturing sites.
The closures could result in around 740 job losses and are part of an effort to reshape its manufacturing network as the company expands its store estate.
Greggs currently operates 2,796 shops and is targeting at least 3,500 locations.
The company said consolidating production would allow it to meet future capacity requirements more efficiently.
“We believe such changes, whilst difficult, are necessary to ensure Greggs continues to meet capacity requirements for growth in the years ahead in the most cost-efficient manner,” it said.
The restructuring is expected to cost about £60 million but generate annual operating cost savings of around £20 million once completed.
The move comes as Greggs continues to contend with inflationary pressures while investing in its expansion and product range.
Like-for-like sales accelerate
Like-for-like sales at company-managed shops increased 3.4% in the 13 weeks to September 26, accelerating from a 2.1% increase in the first half.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said the latest figures showed improving momentum for the retailer.
“Greggs served up a tasty trading update, with total sales growth accelerating to 7.7% over the third quarter.”
“This was driven by more settled weather in recent months, alongside ongoing menu development and product innovation. New store openings also played their part, with the group on track for 100-110 net openings this year, excluding 12 Express locations, making it easier for more customers to tuck into their freshly baked goods,” he said.
Chiekrie added that cost inflation remained manageable at around 2%, while the full-year outlook had modestly improved from previous guidance.
Greggs refreshes menu as high street remains pressured
Greggs, known for its sausage rolls, steak bakes, vegan offerings and sweet treats, has increasingly sought to broaden its appeal with new products while retaining its value-focused proposition.
“Greggs has spent much of the past year answering a single awkward question; has Britain finally had enough sausage rolls? This morning’s update, and the jump in the shares at the open, suggests the answer is still no,” said Adam Vettese, Market Analyst at investment platform eToro.
“Like-for-like sales accelerating to 3.4% is not a boom. It is, however, the first convincing sign that the brand’s value offer and a more interesting menu are cutting through a tired high street. Matcha lattes and chicken rolls will not transform the P&L on their own, but they show Greggs can still refresh itself without abandoning the customers who made it ubiquitous.”
Greggs’ combination of store expansion, menu innovation and cost controls will now be tested against persistent inflation and pressure on household spending as it moves through the remainder of 2026.
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