Greggs has reported an 18 per cent fall in annual profit, as weakening consumer sentiment and slower sales growth weigh on the high street bakery chain.

Pre-tax profit dropped to £167m in the year to 28 December 2025, including the impact of a restatement relating to value-added tax (VAT), the company said on Tuesday.

Trading has also softened at the start of the new financial year. Like-for-like sales rose 1.6 per cent in the first nine weeks of 2026, marking a slowdown compared with stronger growth seen last year.

Shares in the FTSE 250 group fell as much as 3.9 per cent in early trading in London following the update. The stock has declined by more than 25 per cent over the past 12 months, reflecting mounting investor concerns over the outlook for UK consumer spending.

Expansion push continues despite pressure

The results come after Greggs ended 2025 as the most-shorted stock in the UK market, with some investors questioning whether the bakery chain’s rapid estate expansion can be sustained amid softer demand.

Chief executive Roisin Currie has previously defended the group’s long-term growth strategy, which targets more than 3,000 UK shops over time.

Greggs plans to open a further 120 locations this year, continuing its push into retail parks, transport hubs and drive-thru formats.

Despite the weaker profit performance, the company said it still expects full-year profit in 2026 to be broadly flat, although any improvement will depend on a wider recovery in consumer spending.

VAT provision weighs on results

Greggs also flagged a £4.5m provision relating to a historic understatement of VAT, which it said was identified internally and reported to HMRC during the year.

Analysts struck a cautious tone in response to the figures. Shore Capital’s Darren Shirley said there was “little to shout about” in the update, pointing to slowing sales momentum at the start of the year.

While Greggs continues to benefit from its value positioning and broad national footprint, the slowdown suggests even well-established high street staples are not immune to a more hesitant consumer backdrop.