TLDR
- Greggs shares plunged 15% after warning that hot weather in June hurt customer footfall and sales
- The company reported 2.6% like-for-like sales growth in first half 2025, with total sales reaching £1.03 billion
- June was the second-hottest on record in the UK, with temperatures reaching 33°C (91°F) in southern England
- Full-year operating profit expected to be “modestly below” 2024 levels due to current trading conditions
- Despite challenges, Greggs plans to continue expansion with 140-150 net store openings planned for the year
Greggs shares took a beating on Wednesday, dropping 15% after the popular bakery chain warned that unusually hot weather dampened sales in June. The high street favorite known for its sausage rolls and savory bakes found itself in an ironic situation where the heat proved too much for customers seeking hot food.
The Newcastle-based chain reported that like-for-like sales grew 2.6% in the first half of 2025. Total sales reached £1.03 billion, up from £961 million in the same period last year.
But June told a different story. The company said very high temperatures across the UK reduced overall footfall despite increased demand for cold drinks.
June ranked as the second-hottest on record in the UK. Temperatures soared to around 33 degrees Celsius (91 Fahrenheit) in southern England.
The timing couldn’t have been worse for a business built on hot pastries. British consumers clearly opted for cooler alternatives when the mercury rose.
Greggs didn’t specify which products suffered most during the heatwave. But it’s reasonable to assume items like sausage rolls and chicken bakes faced tougher competition from ice-cold beverages.
Weather Woes Hit Bottom Line
The company issued a profit warning alongside its trading update. Full-year operating profit could be “modestly below” 2024 levels given current trading conditions.
This marks a concerning shift for a business that typically thrives on consistent demand. The warning suggests profit margins are feeling the squeeze.
Higher wages and taxes have already pressured the company’s finances in recent months. The weather impact adds another layer of complexity to the profit picture.
Market analyst Mark Crouch from eToro noted the irony of the situation. “Greggs might be feeling the heat, but not in the way it hoped,” he said.
Crouch pointed out that stretched consumers might also play a role. While inflation has eased, household budgets remain tight across the UK.
Expansion Plans Continue Despite Challenges
Despite the setbacks, Greggs maintains confidence in its growth strategy. The company expects to achieve 140 to 150 net store openings for the full year.
This expansion drive reflects management’s belief in the underlying business model. The chain operates thousands of locations across the UK.
Recent product launches have generated buzz on social media. The new Mac & Cheese offering went viral online, showing the brand’s ability to capture consumer attention.
Greggs has built a loyal following through affordable pricing and convenience. The company grew sales by 11% last year to over £2 billion.
Some investors view the current share price as attractive despite recent challenges. The stock trades at around 13 times earnings following the recent decline.
The company’s proven retail formula has delivered consistent results over many years. Management expects to provide more detailed sales breakdowns when interim results are released at the end of July.
Greggs shares have fallen 29% over the past year as investors weigh various headwinds. The weather impact represents just the latest challenge for the high street baker.
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