British food-to-go chain Greggs PLC raised its full-year 2026 financial outlook on September 30, following robust sales growth through the third quarter. The positive performance comes even as the prominent bakery retailer announced major structural changes, including plans to close four manufacturing plants and eliminate approximately 740 jobs over a two-and-a-half-year period.
The company reported a 7.7% increase in total sales for the 13 weeks leading up to September 26. Like-for-like sales at company-managed locations grew by 3.4% during the same timeframe, accelerating from the 2.1% growth recorded in the first half of the financial year. Over the first 39 weeks of the fiscal year, total sales surged by 7.4%, while like-for-like sales rose 2.6%.
Sales Drivers and Summer Performance
Management attributed the sales boost to positive customer reception of new menu items and stabilized weather conditions throughout August and September. Key product drivers included the newly introduced Steak & Stilton Bake, strong-performing iced drinks such as Matcha and Cherry Lemonade variants, as well as relaunched salads and protein-focused food options.
Trading momentum helped push Greggs shares up by roughly 7% to 2,006 pence following the announcement, trading near their 52-week high and reaching their strongest level since July 30. The bakery group now expects a modestly improved outcome for the full year 2026, shifting away from its prior forecast that placed underlying pre-tax profit roughly on par with the previous year’s £172 million.
Manufacturing Restructuring and Cost-Saving Plan
Alongside its upgraded financial guidance, Greggs initiated a formal consultation process to restructure its manufacturing network. The proposed changes involve closing four manufacturing sites to optimize capacity requirements for future growth in a cost-efficient manner.
The consolidation plan is projected to result in about 740 redundancies. Financially, the proposals carry an estimated cash cost of £60 million. This total includes approximately £40 million of capital expenditure alongside disruption expenses and redundancy payouts. In return, Greggs anticipates generating roughly £20 million in annual pre-tax operating cost savings, with financial benefits expected to materialize across the 2028 and 2029 financial years.
Expansion Strategy and Market Challenges
Despite structural downsizing in its manufacturing operations, Greggs continues to push forward with retail expansion. Having grown to 2,796 UK shops-surpassing McDonald’s domestic footprint-the group remains firmly on track to open 100 to 110 net new shops before the end of the year. This supports a long-term strategic target of 3,500 locations.
Analysts note that the company faces a tougher cost environment ahead. While like-for-like cost inflation has hovered around 2% this year, management expects inflationary pressures to build in 2027. Market observers also monitor potential long-term consumer headwinds, including broader economic pressures and the rising popularity of weight-loss treatments affecting demand for higher-calorie fast-food items. Nevertheless, Greggs’ robust sales momentum and resilient customer demand have reinforced investor confidence.
