Shares in Greggs (LON:GRG) rallied after the food-to-go retailer served up stronger-than-expected interim results. In H1, the sausage roll seller delivered further share gains in a tough food-to-go market.
Greggs faces stiff headwinds from subdued consumer confidence and cost pressures. So there was relief among investors as the FTSE 250 firm maintained its FY26 guidance.
The bakery chain is among London’s most-shorted stocks. That suggests today’s share price spike partly reflected short-sellers buying back stock to cover their positions.
Greggs is on a roll
Under CEO Roisin Currie, Greggs outperformed a challenging food-to-go market in H1. The Newcastle-based bakery chain’s value offer continues to resonate with cash-strapped consumers.
Total sales for the 26 weeks to 27 June 2026 grew 7.2% year-on-year to over £1.1 billion. This was supported by new store openings and strong growth through partnerships with Iceland Foods and Tesco (LON:TSCO).
Like-for-like sales in company-managed shops grew by a respectable 2.1%. And pre-tax profits rose 20% to a forecast-beating £76 million. This jump reflected ‘soft’ prior year comparatives, growth in the grocery business and Greggs’ strong cost control.
Tasty potential
During H1, Greggs opened a net 34 new shops and closed the period with a total of 2,773 shops. ‘The initial trading performance of new shops opened in 2026 has been particularly strong,’ insisted the cut-price coffee seller, ‘reflecting our disciplined focus on high-quality locations.’
‘Greggs continued to outperform the market and has delivered an improved sales performance and strong cost control through the first half of 2026, resulting in profitable growth,’ commented CEO Currie.
Significant growth ahead
Currie said Greggs remains focused on opening shops in more catchments and introducing convenient ways for customers to pick up Greggs favourites. At the same time, the company is broadening and innovating its menu in line with changing tastes and trends.
‘We are making great progress in building the supply chain infrastructure that will support the significant growth opportunities that lie ahead’, added Currie.
Back in May, we said Greggs looked like a decent recovery play. Today’s reassuring update confirms the brand remains resilient and fears over ‘peak Greggs’ are overblown.
Greggs sees a clear opportunity for ‘at least 3,500 UK shops’ over the longer term. Management’s confidence in this opportunity is underpinned by Greggs’ success in opening new shops. The food retailer is generating strong returns in catchments such as retail parks, railway stations, airports, roadsides and supermarkets.
We are encouraged to see Greggs continues to take market share. It is increasing access to the brand through new formats such as ‘bitesize Greggs’ and ‘Greggs Express’, a smaller self-service offer suited to the convenience retailing sector.
One point investors should note is that profits in H2 are still guided to be down year-on-year. However, this short-term dip reflects the costs of building the supply chain infrastructure to support the ‘significant growth opportunities’ Greggs sees ahead.
Disclaimer: The author (James Crux) owns shares in Greggs.
Read the press release here: https://corporate.greggs.co.uk/investors
