After years of spectacular growth, Greggs has hit a more turbulent patch, leaving investors to weigh whether the FTSE 250 bakery chain still has meaningful upside.
For a long time, Greggs seemed unstoppable, with full-year 2024 sales topping £2bn for the first time, rising 11.3% compared to 2023.
Underlying pre-tax profit leapt 13.2% to £189.8m, while net store numbers grew by 145 outlets, taking the total estate to 2,618 locations.
Talk of expansion to 3,000 stores and beyond fuelled investor enthusiasm, pushing the share price to levels that reflected significant optimism about future growth.
The momentum stalled sharply in the third quarter of 2025, when like-for-like sales slowed to just 1.5%, down from 2.6% in the first half of the year.
Both figures were well below 2024’s like-for-like performance of 5.5%, raising questions about whether Greggs had reached the limits of its growth story.
The cost-of-living crisis began catching up with the chain, while the government’s increase to employers’ National Insurance and two inflation-busting minimum wage hikes pushed costs higher.
With a price-to-earnings ratio sitting at 23, investors decided they had overextended their enthusiasm, and the shares plunged 38% across 2025.
The recovery story gained traction in first-half 2026, when results released on 29 July showed underlying pre-tax profit soaring 19.7% to £76m on total sales of £1.1bn, up 7.2%.
Greggs has been successfully attracting health-conscious younger consumers through protein salads and trendy drinks such as iced matcha lattes, broadening its customer base considerably.
The shares jumped 16.3% on the day of those results, signalling renewed confidence in management’s ability to adapt the business model to shifting consumer preferences.
Full-year profit guidance was held steady at around £172m, reflecting the impact of heavy supply chain investment including a new Derby distribution facility.
At today’s price of 1,842p, the shares trade on a price-to-earnings ratio of 15, while the trailing dividend yield sits at 3.75%, a more reasonable valuation than recent years.
The 13 analysts currently providing one-year price forecasts produce a consensus target of 1,809p, which would represent a modest decline of 1.8% from the current level.
Analyst sentiment is divided, with four Strong Buy ratings, one Buy, four Holds, one Sell, and three Strong Sell recommendations currently on the stock.
Greggs has been expanding into travel hubs, retail centres, and airports, and recently opened a store at Tenerife South Airport, testing the brand’s appeal beyond its traditional high street heartland.
Evening opening trials represent another avenue being explored, as management seeks to extend trading hours and extract more revenue from existing store locations.
Questions remain about how far the brand can stretch within the UK market before saturation becomes a genuine constraint on further expansion.
Greggs remains a recognisable consumer phenomenon with a loyal customer base, but analysts appear cautious about whether current pricing fully reflects the risks ahead.
