Why store closures don’t spell disaster for Greggs

You’ve likely seen the headline “Greggs shuts 56 branches amid ‘challenging’ start to the year”, or some variation of it.

I’ve had several people bring it to my attention stating ‘it’s not a good sign for the rest of the market that Greggs is shutting shops’, so I wanted to offer a bit of perspective on the matter.

Firstly, the headlines are technically correct. Greggs did shut 56 stores in its latest financial period (26 weeks ended 28 June 2025) but 27 of these were relocations. What’s more, it opened 87 new shops meaning its estate actually grew by 31 to a whopping 2,649 locations across the UK.

As stated in our recent Bakery Market Report, this makes it the second largest business selling baked goods in the out of home market in the UK, second only to Costa. And with growth like that, it likely won’t be long until Greggs is surpassing Costa and taking pole position. It could even be in time for next year’s report as Greggs stated that it remains on track to achieve 140 to 150 net new shop openings in 2025, pointing out that openings are typically weighted to the second half of the year.

This pattern of store closures isn’t unusual for Greggs. As the below table shows, it is constantly rejigging its portfolio. Careful management of an estate, ensuring a business is in the right locations and closing or moving those which are underperforming is an essential part of this type of operation. Margins are thin and the market is tough, so you can’t have loose links bringing down a whole chain.

Away from the store numbers, things are perhaps not quite as peachy at Greggs as they have been. Operating profit is down slightly year on year, but even with a 7.1% drop the business still banked £70.4m profit in the first half of 2025 with profit before tax down 14.3% to £63.5m. It attributed this to ‘challenging market footfall, more weather disruption than in 2024, and phasing cost of headwinds’. Nevertheless, CEO Roisin Currie remains optimistic, pointing to the “disciplined estate expansion and focus on innovation”, as well as progress on its supply chain infrastructure which will help support Greggs in its next phase of growth.

Greggs, like every other business in the baking industry, will need to be surefooted in the future as the latest results have proven it’s not immune to difficult market conditions. But it’s clear some of the headlines can be taken with a pinch of salt.