Wenzel’s Warning | The Bakery Sector’s Financial Fault Lines

Wenzel’s Warning: What One Winding-Up Petition Tells Us About the Bakery Sector’s Financial Fault Lines

Wenzel’s Bakery, a family-founded chain once praised by customers as “better than Greggs,” is now in the spotlight for all the wrong reasons. As reported this week, the business is facing a winding-up petition from HMRC - a serious legal step typically triggered by unpaid tax debts and often a precursor to insolvency proceedings.

The company insists this is a resolvable issue with no redundancies or store closures expected, but the reality is clear: even successful, fast-growing bakery brands are now under financial strain.

And Wenzel’s isn’t alone.

Plimsoll’s latest Bakery Industry Market Report suggests this case may be less of an outlier and more a symptom of a sector where cost pressure, margin erosion and financial fragility are becoming the norm.

Growth ≠ Stability: The New Reality for Bakery Chains

Wenzel’s has grown quickly, expanding to 109 stores and planning further rollout across London and the Home Counties. But growth doesn’t necessarily equate to financial health, a fact underlined by the company’s £4 million profit drop last year, following a £5.6 million decline the year before.

This echoes trends identified in Plimsoll’s bakery analysis:

• 1 in 4 UK bakery businesses are now loss-making
  
  
• Over 20% are rated as financially at risk
  
  
• Profit margins have fallen to a sector average of just 3.9%
  
  

Wenzel’s current challenge is a warning sign not just for independents, but for any operator trying to scale rapidly in a market where costs are rising faster than revenues.

The High Street Squeeze - Big Names Aren’t Immune

Even Greggs, the dominant force in the UK bakery sector, is feeling the pressure. While still delivering strong profits and planning new store openings, its sales growth has slowed to 1.7% in early 2025, down from 2.5% a year earlier. The chain has also closed multiple stores in recent months, a reminder that even market leaders are watching margins closely.

Plimsoll’s data reinforces the idea that scale alone isn’t enough to insulate against sector-wide cost pressures. Energy, ingredients, wages, and rent continue to rise. Many businesses, large or small, are being forced to make difficult decisions as profitability tightens.

Financial Health Now Trumps Footfall

One of the key messages from Plimsoll’s bakery report is that the sector is diverging sharply between strong and weak financial performers.

While consumer demand for baked goods remains consistent, it’s the underlying financial structure of the business - not customer volume, that now defines resilience. Plimsoll highlights over 140 acquisition targets in the bakery market: businesses with a recognisable brand or customer base but insufficient financial stability to weather the current operating environment.

The Wenzel’s case exemplifies this shift. A well-liked brand with high street presence, but under financial pressure behind the scenes.

What Happens Next?

The outcome for Wenzel’s remains to be seen. A resolution with HMRC may yet be achieved. But the wider trend is clear: the UK bakery sector is moving into a new phase of consolidation and restructuring. Businesses that lack cash flow strength, cost control, and strategic flexibility are increasingly vulnerable, no matter how strong their local reputation.

For operators, suppliers, lenders or acquirers, this is a moment to look beyond store numbers and footfall. Financial health metrics matter more than ever, and tools like Plimsoll’s benchmarking data are essential for identifying who’s growing sustainably and who’s just staying afloat. Learn more about your industry today by visiting www.plimsoll.co.uk.