Greggs share price whipsawed on 4 March after Greggs plc (GRG.L) posted 2025 results showing a 17.9% drop in statutory pre-tax profit to £167.4m and flagged broadly flat profits for 2026. Shares fell as much as 13% before a late rebound as investors weighed price rises against softer like-for-like sales. Management cited rising minimum wage costs and taxes behind menu increases, including a £1.35 sausage roll. With cost inflation guided near 3% and energy hedged to 2027, focus now shifts to execution and demand elasticity across the UK estate.

What moved the market on 4 March

Shares dropped up to 13% after the open, then recovered later in the session as investors digested weak profit and flat 2026 guidance. The swing reflected worries about margin pressure and demand after price rises. Buyers stepped in on expectations that hedged energy, modest 3% cost inflation, and store growth can stabilise earnings. Trading was active, and news flow will be driven by upcoming updates.

Short term valuation hinges on growth visibility rather than headline cuts. We think the Greggs share price needs proof that like-for-like sales can absorb increases without denting traffic. Watch elasticity on core lines, the pace of menu innovation, and operational gearing. Any upside surprise on wages or business rates relief would also help sentiment, though management still signals caution on 2026 profit.

Greggs results 2025: key takeaways

Statutory pre-tax profit fell 17.9% to £167.4m in 2025 as input and labour costs weighed on margins, prompting menu price rises to defend returns. Management also guided to broadly flat profit in 2026 as pressures persist, according to reporting by the Guardian. The company continues to prioritise value positioning, but pricing will be an ongoing lever to offset wage and tax increases.

Like-for-like sales growth slowed to 1.6% in the first nine weeks of 2026, a key trend to monitor as price points move higher. Management is leaning on new channels, product mix, and targeted promotions to support volume. The store estate remains a growth driver, complementing digital ordering and delivery to sustain footfall and maintain share in value-led food-to-go.

Cost pressures and pricing power

Minimum wage costs and payroll taxes are rising, pushing the company to raise sticker prices. One example is the £1.35 sausage roll, which the business linked to wage pressures, per the Telegraph. Management aims to protect affordability relative to rivals, using portion sizes, bundles, and targeted offers to limit churn while safeguarding unit economics.

Energy is fully hedged through 2027, reducing volatility in a major cost line and giving planning certainty. Overall cost inflation is guided to about 3% this year, easing from past spikes. That cushion helps, but higher wages will still blunt margin recovery. Execution on pricing, mix, and labour scheduling remains essential to stabilise profit without eroding like-for-like sales.

Growth plans in 2026

Management plans around 120 net openings in 2026, with a focus on retail parks, high streets, and travel hubs. New shops expand reach and support local supply chain efficiency. Site selection will be key to protect returns as costs rise. We expect disciplined rollout, with fit-out spend paced against demand signals and regional performance.

Evening trade and delivery remain important levers for incremental demand. Later opening hours add capacity, while delivery widens the catchment beyond walk-in traffic. Digital ordering and meal deals can lift basket sizes. Success here should help like-for-like sales absorb price changes and keep the brand front of mind for value-conscious UK customers.

Final Thoughts

Today’s move highlights a simple setup for Greggs. 2025 statutory pre-tax profit fell 17.9% to £167.4m and management expects broadly flat profit in 2026. Minimum wage costs and taxes are pushing more pricing, while like-for-like sales slowed to 1.6% in the first nine weeks of 2026. Offsetting that, energy is hedged through 2027 and overall cost inflation is about 3%, with around 120 net openings planned and continued expansion in evenings and delivery. For UK investors, the question is execution. Can volumes hold as prices rise. Will later trading and delivery lift mix and baskets. Can the estate rollout maintain returns as costs rise. Over the next quarters, track weekly like-for-like trends, pricing on core lines such as sausage rolls, wage and rates updates, and any margin commentary. Evidence of stable traffic with firm gross margins would support the Greggs share price. Weak elasticity or slower openings would argue for patience.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.