Greggs (LSE: GRG) shares took a battering on Wednesday morning, plunging 14% to 1,680p, after the high street bakery warned that full-year operating profit could come in modestly below 2024’s result.
The culprit? A sizzling June that put people off sausage rolls and steak bakes.
While most retailers would kill for a 6.9% rise in total sales over six months, like-for-like sales rose just 2.6%, a sluggish figure when set against a backdrop of rising costs and heavier investment. Greggs has been pouring money into store refurbishments and late-night openings, but the footfall simply didn’t follow once the heatwave hit.
The company chalked the slowdown up to “very high temperatures” reducing footfall, particularly in June. That might fly as an excuse once, but it adds to a growing narrative that Greggs is expanding aggressively while its core product, hot pastries, is facing seasonal and structural headwinds. Cold drinks may have picked up the slack slightly, but no one’s rushing to Greggs just for a bottle of Oasis.
Greggs insists it’s playing the long game, with cost mitigation set to boost performance in the second half and less challenging sales comps ahead. But the market clearly isn’t buying it right now. The share price is down nearly 30% year-to-date, and 37% off its August 2024 peak, a stark fall for a firm once seen as inflation-proof and recession-resilient.
For a brand that built its empire on warm pastries and cold logic, it now faces a different kind of heat, one that no aircon unit or iced latte can fix.