Shares in Greggs (GRG) rallied after the food-to-go retailer reported improved trading for the first 19 weeks of 2026 and left full-year guidance unchanged.
Led by CEO Roisin Currie, Greggs highlighted ‘encouraging profit progress’ during a challenging opening four-and-a-bit months of 2026.
This partly reflected weak sales comparatives but also the FTSE 250 firm’s ‘good operational cost control’.
Investors were also intrigued by news the sausage rolls-to-salads seller has picked holiday hotspot Tenerife as the location for its first overseas airport outlet. This suggests management believes the quintessentially British Greggs brand can travel overseas.
Sales growth strengthens
The Newcastle-based baker’s like-for-like sales in company-managed shops were up 2.5% in the first 19 weeks of 2026.
Encouragingly, Greggs said growth improved to 3.3% in the most recent 10 weeks thanks to a broadening and refresh of its menu. The firm highlighted ravenous demand for its new chicken roll and matcha drinks range.
Total sales fattened up 7.5% to £800 million in the 19 weeks to 9 May. ‘Partnerships with franchisees and grocery retailers are progressing well and contributing to the growth in overall sales,’ explained Greggs. The top-line is benefiting from the expansion of its range with Iceland and the launch of a ‘Bake-at Home’ range with Tesco (TSCO).
Greggs did sound a note of caution over the situation in the Middle East. ‘Should the conflict continue and become prolonged we, like all food retailers, will likely see higher overall cost inflation through the end of 2026 and into 2027,’ cautioned the company.
Targeting Tenerife
Currently trading from 2,759 shops, Greggs will shortly open its first outlet in an airport outside the UK, working in partnership with global travel operator Lagardere Travel Retail at Tenerife South Airport.
Greggs explained: ‘Tenerife South is a destination for millions of UK and international passengers each year and represents an excellent opportunity to test our offering in an international travel hub.’
Greggs’ sales growth has slowed in recent years due to weak consumer spending, fierce competition and weight-loss drug headwinds. So the news like-for-like sales growth is picking up will come as a relief to shareholders. It also means Greggs is starting to look like a decent recovery play.
We think fears over ‘peak Greggs’ are overblown given the robust demand Greggs is seeing for its affordable products. Greggs is targeting over 3,000 UK stores in the long term, and if the Tenerife foray is a success, this will provide a new overseas growth angle to the story.
It is also reassuring that there has been no change to Gregg’s outlook for cost inflation. In the near term at least, the group’s forward buying of key commodities ‘continues to provide protection against increased inflation’.
Disclaimer: James Crux has a personal investment in Greggs.
Read the press release here: https://corporate.greggs.co.uk/investors
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