Greggs shareholders have been handed a welcome reprieve, after the stock jumped 6.7% on Tuesday.
Beset by fears the UK had hit ‘peak Greggs’, the bakery chain’s stock had tumbled through 2025. Trading updates through the year showed stagnating like-for-like sales and lower profits.
However, a fresh update to investors this week showed like-for-like sales improving 2.5% in the first 19 weeks of the year. That growth ramped up to 3.3% in the past 10 weeks of trading, after a wet February. Greggs’ profit forecast remained unchanged, and is predicted to be flat year on year at around £170m.
While not enough to warrant upgrading its full-year guidance, the figures made for a “reassuring” update, said AJ Bell head of markets Dan Coatsworth. “It’s been a while since Greggs could prove to the market that business hadn’t gone stale,” he added.
Worries over Greggs’ ability to compete in a rapidly evolving market – one that increasingly favours healthy options – have also been allayed by standout performances from NPD including its chicken sausage roll and an “extremely popular” iced matcha drink. This month it also launched new health-focused salads and fresh pastas.
The ability to attract younger audiences with on-trend products would be vital to any recovery in share price, said Freetrade investment writer Duncan Ferris, who called like-for-like momentum “key”. “Opening more shops is useful, but better trading from Greggs’ existing roster of stores must be the goal,” he said.
“To that end, successful new product launches, like the chicken roll and matcha drinks, are vital to the business’s efforts to stay relevant and offer customers value.”
Greggs recorded a 7.5% rise in total revenues for the period to £800m, as it opened 41 new shops.
Despite the jump in share price, analysts were cautious of declaring any long-term recovery.
“Volumes appear to be finally stabilising,” said Panmure Liberum analyst Ben Hunt. “We believe the group may be moving closer to an inflection point, although evidence of a sustained recovery remains limited.”
Peel Hunt’s Jonathan Pritchard called the update a “perfectly presentable statement”, and praised Greggs’ cost controls – but added that questions remained over the chain’s value proposition and the risk of market saturation. “The second quarter was fine, but not enough to allay enough of those fears for us to be positive.”
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