Update 2 - UK Greggs raises profit forecast but plans to close some factories

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James Davey

Reuters London, September 30 - Greggs (GRG.L), the UK's largest fast food chain, raised its annual profit forecast after robust sales growth in the third quarter and announced plans to close four production sites as part of its operational efficiency drive.

The group, renowned for its sausage rolls, vegan products, and desserts, said same-store sales at company-owned shops grew 3.4% in the 13 weeks to September 26, up from 2.1% in the first half of the financial year (link).

The company said operating conditions improved this quarter, thanks to new product launches—including “steak and Stilton cheese bakes”—and stable weather in August and September.

Official data released on September 18 (link) showed UK consumer spending unexpectedly increased in August.

Greggs has 2,796 shops in the UK, more than McDonald's MCD.N. The company previously forecast basic pre-tax profit would match last year's £172 million ($228 million), but now expects performance in 2026 will see a "slight improvement."

The company’s share price recently rose by 6.5%.

Production site closures

The group also said it plans to relocate some manufacturing operations and close four production sites. The company has started consultation procedures and expects about 740 positions will be cut within two and a half years.

“We believe that, although these changes are challenging, they are necessary to ensure Greggs can meet growth capacity demands in the coming years in the most cost-effective way,” the company said.

The plan is expected to cost £60 million but could save £20 million in operating expenses each year.

Some analysts believe that, after fast expansion in recent years, the UK may have reached “peak Greggs,” but the company denies this view.

Analysts are also concerned that rising use of weight loss drugs—particularly the new oral GLP-1 medications—could reduce demand for Greggs’ high-calorie products among frequent customers.

However, Greggs plans a net increase of 100 to 110 new shops in 2026 and has set a long-term goal of 3,500 stores.

(1 US dollar = 0.7547 pounds sterling)

(To assist non-native English speakers, Reuters has automatically translated its reports into several other languages. As automated translation may contain mistakes or lack context, Reuters does not guarantee the accuracy of automated translation and provides it for reader convenience only. Reuters accepts no liability for any damage or loss caused as a result of using machine translation.)