Food-on-the-go retailer Greggs (GRG) has endured a miserable start to 2025, with its shares down more than 35% year-to date to their lowest levels since 2022.

A warning in January from chief executive Roisin Currie of lower consumer confidence, which ‘continues to impact high street footfall and expenditure,’ constituted an early negative catalyst.

That was followed by downbeat guidance alongside the full-year results on 4 March. Like-for-like sales growth slowed to 2.5% in the final quarter of 2024 and trading remained subdued, with like-for-like growth slowing to 1.7% in the first 9 weeks of 2025 impacted by a weather-blighted January. 

Greggs said it expected costs to increase due to inflation, although it said they would be covered by the price increases introduced last year.

The firm also warned that in 2026 and 2027, higher costs from expanding its manufacturing and distribution operations would have an impact on margins, although in the longer-term profitability should recover, with return on investment expected to reach around 20%.

Berenberg remains relatively confident in the company’s prospects: ‘We think Greggs’ longer-term opportunity remains intact despite the cyclical headwind to like-for-like sales growth at present.

‘The pressures that have driven a deceleration in Greggs’ like-for-like sales growth are both cyclical and industry-wide, rather than company-specific issues associated with the store estate reaching or nearing saturation point, as bears are increasingly suggesting.’

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