It’s rare to walk past a Greggs that doesn’t have a line all the way out the door. It’s a British high street staple, hailed as much for its ability to ride the wave of UK trends as for its iconic sausage roll.

New branches of the bakery chain have been opening across the UK at a rate of knots in recent years, with the iconic blue and orange logo popping up in supermarkets, airports and petrol stations. So, why has the nation’s favourite pastry-based brand been struggling of late?

This time last week, an unscheduled trading update warned that Greggs’ 2025 operating profits – which will be announced on Tuesday 29 July – are likely to be “modestly below” 2024’s record year. This came alongside the less-than-positive news that like-for-like sales had grown by just 2.6% in the 26 weeks to 28 June.

June’s unusually hot weather was cited as one reason at the time, but it’s not quite the full story. Unfortunately for the food-to-go chain, profits have been downgraded again today (23 July) with analysts citing higher competition in the sector and store densities nearing capacity as headwinds for the business.

Peel Hunt’s profit before tax forecasts have fallen from £187m to £170m as it anticipates a “slow recovery”.

It stated: “Whilst the Greggs brand is strong, downgraded revenue growth expectations and reduced forecast momentum are a concern.”

Will Greggs get lost in the food-to-go market?

Last year, Greggs claimed an “all-time high” 8.2% share of the food-to-go market (which is set to be valued at £24bn this year, according to data from Lumina Intelligence). It overtook McDonald’s as the UK’s number one breakfast location, with a 19.6% share of morning visits.

But competition is only getting stronger, with powerful players like KFC, Burger King and Subway battling it out for a place at the top of a sector which is becoming increasingly saturated by the new wave of US-founded fast food joints, such as Taco Bell, Dave’s Hot Chicken and Popeyes.

While these brands have a very different product offering, with no Great British pasties or bakes on the menu, they are hugely popular on social media and with younger consumers – a space Greggs has previously taken with its 2022 Primark collaboration.

With 177,000 followers on TikTok, Greggs is no social slouch – but admits it might need to up its game. Its own description on the app reads: “The sausage rolls your dad always bangs on about.”

Perhaps greater investment into marketing to this key customer base could help Greggs compete with the fresher, more exciting players on the UK food-to-go scene.

Peel Hunt says Greggs’ like-for-like growth expectations are underpinned by the growing competitiveness of the sector, which has seen fast food chains like McDonald’s improving promotions and supermarkets investing in the value and range of their meal deals.

Meanwhile, Greggs is investing in expanding its presence further across the UK. It already has over 2,600 shops and plans to open up to 150 more this year. By comparison, there are approximately 1,300 McDonald’s restaurants in the UK.

This focus on footprint comes as a cause for concern for some analysts, who believe Greggs is reaching capacity at a time when trading momentum is weak.

Are opening times and hot weather really to blame?

As well as opening more stores, Greggs has also been keeping those it does have open for longer, with many inner London sites now open until 8pm or 9pm. Although over 1,200 branches are now open for evening trading, Ben Hunt, analyst at Panmure Liberum, told The Grocer last week that the “limited traction” of this type of strategic initiative is one of the reasons Greggs might struggle to find renewed momentum.

Slow like-for-like sales have also been attributed to June’s hot weather, which reduced overall footfall after a positive month of trading in May, although some analysts were quick to debunk this claim, arguing that more people head to the high street when the sun is out. 

Price increases are also adding to Greggs’ struggles, depite the chain taking a more “conservative approach”, by raising the price of meal deals rather than individual items, allowing it to uphold its value credentials.

At a time when many of its competitors are also increasing prices to mitigate rising energy, food and labour costs, it’s unlikely that price increases would come as a major shock to customers.

With the business unveiling its latest financial results next week, many will be watching the business to see how it addresses its struggles and whether a change in strategy would be the best way forward.

It would be very hard for Greggs to get lost among the competition, but the food-to-go giant will need to up its game if it is to remain at the top.

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