Greggs Shares Soar as New Products and Hedged Energy Costs Boost Profits
The bakery chain reported a significant increase in profits and sales, attributing success to new menu items and effective energy cost management.
Greggs shares surged by nearly a fifth, reaching their highest level in over a year, as the company announced bumper profits and strong sales figures for the first half of 2026. The bakery chain reported that sales topped £1.1 billion for the 26 weeks ending June 27, a 7.2 percent increase compared to the same period last year. This performance marks a notable recovery after facing challenges from heatwaves in the previous summer, which had previously impacted demand for baked goods.
Resilient Strategy in Changing Climate
Chief executive Roisin Currie highlighted the company's enhanced resilience, stating that Greggs has developed a more diverse range of products to cater to changing consumer habits, particularly during warmer weather. "As we started to see these hot weather trends become more of a norm at certain points in the summer period for the UK, then we have been developing a number of different ranges," Currie explained.
New additions to the menu, including a highly successful chicken roll and iced matcha drinks, are credited with driving sales. Other popular items that contributed to the positive results include new salads, such as chicken caesar and prawn pasta, and drinks like blueberry matcha, which offer customers reasons to visit even on hot days. Currie noted that sales typically see a dip when temperatures exceed 30 degrees Celsius.
Despite the focus on adapting to warmer conditions, Greggs remains committed to its core customer base by introducing contemporary flavors in its hot food offerings, such as a tandoori chicken pizza.
Financial Performance and Expansion Plans
Higher sales translated into a significant profit increase, with earnings surging by a fifth to £76 million over the half-year period. The company has slightly adjusted its store opening targets for the current year, aiming for between 100 and 110 new locations, down from an initial projection of 120. However, Greggs maintains ambitious long-term expansion plans, intending to open more than 700 additional stores to reach a total of 3,500 outlets. This growth will be supported by ongoing investments in its distribution centers in Derby and Kettering.
Greggs is also exploring innovative retail formats, with plans to trial 10 new Greggs Express shops offering self-service options for coffee and food. In a positive development for consumers, the company has indicated that there are no further price increases planned for the remainder of the year, a move attributed to successful hedging of energy costs.