Greggs has served up stronger Christmas sales but said the food-to-go market was struggling with “subdued” consumer confidence.
Shares in Greggs tumbled by about 8% on Thursday after its boss gave a bleak assessment of the economy and warned that household incomes remained stretched.
Chief executive Roisin Currie said it nonetheless had no current plans to raise prices after hiking them on some products before the end of the year.
The bakery chain, which has about 2,740 shops, said it was performing better than competitors in the market.
Total sales jumped by 7.4% over the three months to December 27, bringing its yearly sales to £2.15 billion, 6.8% higher than 2024.
This takes into account new shop openings leading to more spending, with 121 net new shop openings during the year.
Sales at company-managed shops, as opposed to franchises, rose at a slower rate of 2.9% when compared like-for-like with the previous year.
Greggs highlighted its “line-up of seasonal favourites” over the Christmas period, including its festive bake and vegan version, and a festive flatbread to meet demand for lighter lunchtime choices.
It also hailed an increase in its share of the wider market thanks to more customer visits, including for breakfast and in the evening.
But the sales update came with a note of caution as the company said consumer confidence was “subdued” and affecting the food-to-go market.
Chief executive Ms Currie said household disposable income was “now more under pressure than it’s ever been”.
“Therefore, at the end of the month, there’s a portion of customers that don’t have a lot of disposable income to spend, so they’re having to make choices about how and where to spend money,” she said.
“Where they do have disposable income, consumers are spending rather than saving.
“There’s no doubt that it’s been a very challenging 2025 for the consumer.”
“We actually think that a lot of that will continue into 2026 but we are hopeful that that will start to improve. But for now we are taking a cautious outlook.”
Nevertheless, Ms Currie said that inflation was expected to “lower this year than it’s been for a number of years”, adding: “That potentially will give a bit of respite to the consumer.”
“There aren’t any plans for any further prices just now, but we will continue to keep that under review alongside the cost inflation that we will bear in the business.”
Greggs raised prices on some of its products and meal deals several times during 2025.
She added that the chain was focused on being “even more convenient for customers” and providing value-for-money for those “managing their budgets carefully”.
The company has been taking action to help mitigate rising business expenses, including higher wages and taxes, and investments into its supply chain.
Greggs forecast that its profits will be broadly flat in the year ahead, compared to 2025, adding that any improvement will be “contingent on a recovery in the consumer backdrop”.
