Greggs Q4 trading update
Solid trading, slower momentum
Dear Reader,
Greggs’ Q4 trading update landed today, and on the face of it, it looks perfectly fine. Sales are up, market share is growing, and management sounds confident heading into 2026.
But once you get past the headline numbers, this update feels less like a growth story and more like a reminder of where Greggs now sits in the UK market: a very well-run, very large business operating in a tough consumer environment and one that’s starting to feel its own scale.
That doesn’t make it a bad company. Far from it. But it does change how investors should think about it.
Shares down -10% as of this morning after the results.
The sell-off appears driven less by the numbers themselves and more by flat profit expectations into 2026 and ongoing margin pressure, rather than any deterioration in trading.
Summary Of Results
Total sales up 7.4% in Q4; FY25 total sales up 6.8% to £2,151m. Like-for-like (LFL) company-managed sales rose 2.9% in Q4 and 2.4% for the full year.
121 net new shop openings in 2025, bringing the estate to 2,739 shops. 207 new openings, 50 relocations and 36 closures.
Market share gains in visits, including breakfast and evening dayparts.
Structural cost efficiencies of £13m delivered, aiding value pricing.
Net cash reduced to £47m from £125m in 2024, reflecting peak investment in supply chain and expansion.
Capex expected to fall significantly in 2026, with Derby and Kettering supply chain assets coming online.
Profit guidance in line with expectations, but with margins under pressure and profits expected to be flat year-on-year in 2026.
Sales Are Growing - Still
Greggs did grow again in 2025. Full-year sales came in at £2.15bn, up 6.8%, while like-for-like sales in company-managed shops rose 2.4%. In the fourth quarter, LFLs ticked slightly higher at 2.9%.
Taken in isolation, that’s a perfectly respectable outcome. The consumer backdrop remains fragile, food-to-go is discretionary, and plenty of UK retailers would be pleased with any like-for-like growth at all.
But context matters. Only a couple of years ago, Greggs was delivering mid-single-digit LFL growth as standard. Compared with that recent history, this is a business that is still growing, but doing so much more slowly.
That slowdown isn’t hard to explain. Greggs now has nearly 2,800 shops across the UK, meaning it’s no longer expanding into obvious white space. Each additional store has to work harder for its sales, and incremental growth increasingly depends on higher footfall or higher spend per visit, both of which are difficult when households are watching every pound.
There’s also a subtle shift in where growth is coming from. Total sales growth is being supported more by new store openings than by strong like-for-like performance. That’s fine in the short term, but over time it raises questions about sustainability and returns, especially as the estate becomes denser.
So yes, Greggs is still growing. But this is no longer a momentum story. It’s a large, mature operator nudging sales forward in a flat market and investors should read these numbers as defensive resilience rather than acceleration.
The Financials
Greggs finished 2025 with £47m of net cash, down sharply from £125m a year earlier. At first glance, that drop looks dramatic. In reality, it tells you more about where the business is in its investment cycle than about any underlying weakness.
Over the past two years, Greggs has been deliberately spending hard. New shops, relocations, refurbishments and, most importantly, major supply chain projects have absorbed a lot of cash. The Derby frozen facility and the new national distribution centre at Kettering are not minor upgrades they are long-term infrastructure investments designed to support a much larger business.
That investment phase is now largely complete. Management has been clear that 2025 represented the peak in capital expenditure, and that spending will fall materially in 2026 and again in 2027. This matters because it changes the cash flow profile of the business. Once those projects move from “build” to “operate”, cash outflows should reduce sharply while the benefits gradually feed through to efficiency and capacity.
Even after this heavy investment, Greggs remains in net cash, with no balance sheet stress and no need to rely on external financing. That’s an important distinction. Many UK consumer-facing businesses have had to lean on debt just to stand still over the past few years. Greggs hasn’t.
That said, the balance sheet is less cushioned than it was. The days of triple-digit net cash are gone, at least for now. This reduces flexibility at the margins, particularly if trading were to deteriorate more than expected, but it does not change the underlying resilience of the business.
What investors should really focus on is what comes next. As capex steps down, Greggs expects to move back from net cash consumption to net cash generation. If like-for-like sales remain positive and cost control holds, free cash flow should begin to rebuild, supporting dividends and restoring balance sheet headroom.
To Conclude:
Overall, this update reinforces Greggs’ position as a resilient, well-invested operator, but one entering a more mature phase of growth. The next phase is less about expansion speed and more about execution, cash generation and defending margins in a tough consumer market.
Thanks for reading,
Ollz
The information provided in this article is for informational purposes only and represents my personal opinions and analysis. It should not be construed as financial advice or a recommendation to buy or sell any securities. Investing in the stock market carries risks, and past performance is not necessarily indicative of future results. Readers are strongly encouraged to carry out their own research and seek advice from a qualified financial advisor before making any investment decisions. I do not accept any responsibility for any financial losses or consequences that may arise from reliance on the information presented in this article.
Great write-up, fully agree with you. Thanks for the post!