Greggs serves up Christmas sales boost despite ‘challenging’ market

Dan Coatsworth, head of markets at AJ Bell, said: “Greggs’ trading update is as lukewarm as one of its sausage rolls.

“Fourth quarter like-for-like sales growth of 2.9 per cent is far from outstanding, and forward guidance lacks any sparkle.

“It expects no profit growth in 2026, which is a gloomy outlook for a business that’s rapidly expanding across the country and one of Britain’s biggest food-on-the-go names.

“Weak consumer confidence and extra costs linked to supply chain initiatives don’t bode well for margins short-term.

“Despite this disappointing outlook, it’s important to recognise that Greggs is a British success story.

“It just feels as if the business has grown too fast and that it would be better served taking stock of events, focusing more on improving store efficiency, simplifying the menu, and slowing down the pace of new store openings. Less is more, after all.

“Greggs is the most shorted stock on the UK market and those betting against the company have been cleaning up.

“The shares fell further on the latest news and bears might be happy to sit tight as there wasn’t anything in its update to make them reappraise a negative stance.

“The flipside is that the lower the shares go, and the cheaper its valuation, the more likely that activist investors will dial up pressure on the business for change, or takeover interest appears.”