Greggs PLC saw a 9% drop in underlying pre-tax profit for the first quarter of 2026, attributed to a slowdown in sales across its UK bakery network. The decline marks a shift from previous growth momentum, with same-store sales rising just 0.7% compared to 3.2% in the same period the prior year.
- Greggs PLC reported a 9% drop in underlying pre-tax profit to £46.3 million for Q1 2026
- Same-store sales rose just 0.7%, down from 3.2% in Q1 2025
- Unit volumes for core products declined 1.2%, with weekday sales down 2.4%
- GRG.L stock fell 1.8% on the announcement, underperforming the UKX index
- The company maintained its dividend and reaffirmed long-term growth strategy
- Consumer cost-of-living pressures cited as primary factor behind sales slowdown
Greggs PLC reported a 9% decline in underlying pre-tax profit for the 13 weeks ending February 28, 2026, falling to £46.3 million from £50.9 million in the same period of 2025. The company cited persistent consumer cost-of-living pressures as a key factor dampening footfall and transaction volumes in its 2,200 UK stores. Same-store sales increased by only 0.7%, well below the 3.2% growth recorded in Q1 2025, signaling a notable deceleration in momentum. The performance contrasted with broader trends in the consumer staples sector, where inflation-adjusted demand remained resilient in categories like groceries and beverages. However, Greggs' core baked goods—particularly its flagship sausage rolls and pasties—experienced a 1.2% decline in unit volumes, with weekday sales down 2.4% compared to the previous year. Management attributed part of the shortfall to lower-than-expected traffic during the winter months and a reduction in promotional activity. The stock, trading under the ticker GRG.L on the London Stock Exchange, dipped 1.8% in early trading following the announcement, slightly underperforming the broader UKX index, which was flat. Analysts noted that while the results were below expectations, the decline was not indicative of structural issues, with the company maintaining its dividend and reaffirming its long-term growth strategy. Still, investors are now pricing in a more cautious outlook for the sector, especially for high-traffic, discretionary food retailers.