Greggs, the well-known UK high-street baker, famous for its sausage rolls and hot savoury bakes, announced on Wednesday that uncharacteristically hot weather in June negatively impacted its sales for the month.
The bakery chain experienced a roughly 15% drop in its share price on Wednesday.
The decline in shares of Greggs followed a trading update from the company, attributing the decrease in customer footfall and like-for-like sales in June to unseasonably hot weather in the UK.
Why sales at Greggs took a dip
Despite increased demand for cold drinks due to the heatwave, Greggs experienced a decline in overall footfall last month, resulting in weaker like-for-like sales, Investing.com said.
Greggs said in the release:
Whilst acknowledging that comparative like-for-like (LFL) sales are less demanding in the second half of the year, in light of the current trading conditions, the Board now anticipates that the full year operating profit could be modestly below that achieved in 2024.
In the first half of 2025, total sales reached £1.03 billion ($1.4 billion), an increase from £961 million during the same period last year, with like-for-like sales growing by 2.6%.
However, the company noted that like-for-like sales in June were affected by “very high temperatures” across the UK.
While demand for cold drinks rose, overall customer traffic decreased during what was the second-hottest June on record in the UK.
Heatwaves affect hot bakes demand
British consumers have embraced the baker’s offerings, with its sausage rolls, chicken bakes, and jam donuts consistently ranking as best-sellers.
The new Mac & Cheese offering also quickly gained popularity, achieving viral status on social media.
Sales of the company’s hot bakes were likely impacted by the recent heatwave in the south of the country, where temperatures reached approximately 33 degrees Celsius (91 Fahrenheit).
British consumers probably chose cooler alternatives, though the company did not explicitly state this as a reason for the affected sales.
Greggs is anticipated to disclose further specifics regarding the impact on its sales during the release of its 2025 interim results, scheduled for late July.
On Wednesday, the company issued a warning that its full-year operating profit might be slightly lower than 2024’s due to “current trading conditions.”
Despite this, it remains optimistic about its expansion plans, aiming for 140 to 150 net openings by year-end.
Positive outlook
Several analysts maintained a positive outlook on Greggs’ long-term prospects, notwithstanding the pessimistic guidance.
“While obviously disappointing that full-year expectations are nudging back, we do not see this as a reflection on the underlying health of the business,” Jefferies said in a note.
Mark Crouch, market analyst for eToro, told CNBC:
Greggs might be feeling the heat, but not in the way it hoped.
“For a brand that’s built its success on affordability and convenience, a dip in demand raises eyebrows, especially when footfall should be strong,” he said.
Crouch further elaborated:
While selling a hot sausage roll during a heatwave is undeniably challenging, the broader economic climate, particularly the pressure on consumers’ wallets despite easing inflation, could be a significant factor.
Greggs’ value proposition, it seems, might be losing some of its appeal.
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