Greggs issues profit warning due to reduced customer visits during the heatwave
In an unexpected turn of events, the UK's popular bakery chain, Greggs, has issued a profit warning for the full year, citing the recent heatwave as the primary cause for reduced footfall and like-for-like sales in June.
Despite a strong performance in the first half of the year, the scorching temperatures that made June 2025 one of the hottest on record in the UK, have significantly dented sales momentum. While the heatwave has increased demand for cold drinks at Greggs, it has not been favourable for overall sales, as customers have been deterred from venturing out.
For the 26 weeks ending 28 June 2025, Greggs reported total sales up 6.9% to £1.03 billion, with like-for-like sales rising by 2.6%. However, growth notably slowed in June due to the heatwave. This slowdown has led Greggs to warn that its full-year operating profit is expected to be modestly below 2024 levels.
The heatwave has not only impacted Greggs' sales but has also added to the cost pressures the company is facing. Inflation and wage tax increases have already resulted in price hikes on some products, such as the iconic sausage roll. Despite these challenges, Greggs remains confident in its expansion plans, having opened 87 new shops in the first half of 2025 and targeting 140 to 150 net new openings by year-end.
The unusual heatwave sweeping across the UK has not only affected Greggs but has also caused a series of health alerts in Europe, closed schools, and limited outdoor work. Interestingly, the heatwave has not been mentioned as a factor in the acceleration of food prices in Britain, which surged in June at the highest rate since March 2024, causing overall shop prices to increase for the first time in nearly a year.
Despite the profit outlook, some analysts remain optimistic about the company's future, viewing the potential dip in Greggs' annual operating profit as not a reflection of the underlying health of the business. Jefferies, an analyst, for instance, has maintained a 'buy' rating on Greggs' shares, despite their 15% drop since the start of the year.
With over 2,000 stores in the UK, Greggs has more store numbers than fast food giant McDonald's, demonstrating its strong presence in the British high street. The company, known for its sausage rolls, steak bakes, and vegan bakes, continues to adapt and navigate the challenges posed by the current climate, aiming to maintain its position as a favourite among British consumers.
[1] - Source: Greggs' Half-Year Trading Update, 23rd July 2025. [2] - Source: The Guardian, "Greggs issues profit warning as heatwave hits sales", 23rd July 2025.
The heatwave in June 2025, one of the hottest on record in the UK, not only affected Greggs' sales but also contributed to higher cost pressures for the industry due to inflation and wage tax increases.
Despite the heatwave's negative impact on footfall and sales momentum, Greggs remains ambitious in its business expansion, targeting 140 to 150 net new openings by year-end.
