Greggs (LSE: GRG) has been one of the most talked-about stocks on the FTSE 250 over the past two years, and not always for the right reasons.
The beloved British bakery chain saw its share value roughly halve between September 2024 and September 2025, a dramatic fall for a brand with such widespread consumer loyalty.
Since then, the stock has done very little to reward patient investors, with those who bought in at the start of 2026 barely seeing any movement in either direction.
A notable headwind keeping buyers at bay is the significant short-seller interest surrounding the food-on-the-go retailer, which currently ranks as the fourth most shorted company in the entire market.
That level of short interest signals that a meaningful cohort of traders is actively wagering the share price will remain under sustained pressure for the foreseeable future.
The core concerns that triggered the original sell-off have not disappeared, with consumer demand still being squeezed by a difficult cost-of-living environment that reduces high street footfall.
Rising business costs, the potential long-term impact of weight-loss drugs on eating habits, and the risk that continued store openings could cannibalise existing sales are all live issues for the company.
Extreme summer weather is another risk worth considering, since hot conditions tend to dampen demand for hot savoury pastry products, one of the bakery’s core offerings.
However, not every cloud hanging over Greggs is permanent, and the company’s strategic focus on value over luxury actually positions it more favourably than premium food retailers during a cost crunch.
Greggs has also been expanding beyond traditional high street units, tapping into travel retail opportunities such as airport locations, suggesting the argument that the company has reached peak growth may be premature.
Despite rising debt levels, the company’s finances are not showing signs of serious stress, and the current dividend yield stands at a respectable 4%, offering some income comfort to long-term holders.
The current price-to-earnings ratio of 14 for 2026 could eventually look like a bargain entry point, though the timing of any recovery remains deeply uncertain.
Half-year results from the Newcastle-based business are due at the end of July, and May’s trading update did show a slight improvement in sales growth, though the market appears to be waiting for something more convincing.
Looking further ahead, higher cost inflation in 2027 is anticipated if the Middle East conflict continues, adding another layer of caution for investors considering a position in the stock right now.
