Greggs‘ Shuttering Stores: What’s Baking in the Future of the Bakery Chain?

Published: July 29, 2025

The high street favorite, Greggs, recently announced the closure of over 50 stores in the first half of 2025, marking a “challenging start” to the year. This news, coupled with a slowdown in sales growth and a drop in pre-tax profits, raises questions about the future trajectory of this beloved bakery chain. Let’s delve into the factors at play and what they might signal for the future of Greggs and the wider food industry.

The Numbers Tell a Story: Analyzing the Current Challenges

The figures speak volumes. The 61% increase in closures without relocation, compared to the same period last year, is a significant red flag. While Greggs is still expanding, the 40% decrease in net new shop openings indicates a shift in strategy. They are targeting a “disciplined estate expansion”, which may impact long-term profitability.

The company, while still reporting solid revenue (total sales up 7% to just over £1 billion), has seen its sales growth halved compared to 2024. Pre-tax profits have also dipped 14% to £63.5 million. This underscores a difficult operating environment, compounded by challenges such as footfall declines, more frequent weather disruptions, and increasing cost pressures.

Key Trends Influencing Greggs’ Performance

• Changing Consumer Habits: The rise of hybrid working models and a shift toward online ordering are changing where and how people buy their food.
• Inflation and Cost Pressures: Rising ingredient costs, energy prices, and wages are squeezing profit margins across the food industry.
• Increased Competition: Greggs faces stiff competition from other fast-food chains, coffee shops, and supermarkets.

Strategic Moves and Future Plans

Greggs is not standing still. They’re investing heavily in their supply chain, with a new frozen manufacturing and logistics site in Derby and a new distribution centre in Kettering. These investments, coupled with a continued focus on innovation, are aimed at supporting future growth.

The company also declared a dividend of 19p, in line with last year, which may indicate confidence in future profitability despite current struggles. This means the board believes they will be able to maintain profitability.

Pro Tip: Keep an eye on Greggs’ online presence. They may begin to offer more click and collect options and partner with delivery services.

The Wider Industry Context: What’s Happening in the Bakery Sector?

Greggs’ situation isn’t isolated. Many businesses are navigating similar headwinds. The food industry, in general, is adapting to dynamic consumer demands and economic volatility. Many are rethinking their expansion plans as costs climb.

Did you know? The global bakery market is projected to reach $546.6 billion by 2027, but growth rates vary significantly across regions. Trends toward healthy options and convenience are driving innovation.

The trend towards healthier options is also affecting the market. This is an area Greggs may need to embrace further. For example, they could invest in more vegetarian and vegan options.

Future Predictions: What Can We Expect?

Predicting the future is always tricky, but here are a few potential trends to watch:

• Digital Transformation: Enhanced online ordering, mobile apps, and loyalty programs will become even more crucial.
• Menu Innovation: Expect to see more focus on healthier options, plant-based alternatives, and seasonal offerings.
• Supply Chain Resilience: Companies will prioritize robust supply chains to mitigate risks and ensure consistent product availability.
• Strategic Partnerships: Collaborations with delivery services and other businesses may become more common.

Greggs’ future will depend on how effectively it can adapt to these trends and the economic situation. Its willingness to invest in infrastructure and innovation, combined with a customer-centric approach, will be crucial in navigating the challenging landscape.

FAQ: Answering Your Burning Questions

Why is Greggs closing stores?

The company is facing challenges, including economic pressures and changing consumer habits. Closures without relocation increased 61% over the same period last year.

Is Greggs still expanding?

Yes, but at a slower pace. The number of net new store openings has decreased.

What are Greggs’ key strategies for the future?

Greggs is investing in its supply chain, focusing on innovation, and targeting a “disciplined estate expansion.”

For more insights, check out our article on Greggs’ struggles in June.

What are your thoughts on Greggs’ future? Share your comments and predictions below!