This has been a brutal year for shareholders of high-street food chain Greggs (LSE: GRG). The Greggs share price has crashed hard in 2025, leaving its owners — including my family portfolio — feeling pretty queasy. With this stock lying far below the highs of 2021/22, what might stop the rot and get this share surging again?
Gruesome Greggs
In many ways, Greggs is a great British success story, serving ‘food on the go’ — including sausage rolls, sandwiches and hot drinks — to millions of customers every day from over 2,650 outlets.
The group started out in Newcastle upon Tyne in 1939, with John Gregg delivering goods by bicycle. The first shop opened in Gosforth in 1951 and the company aims to expand its estate to 3,000 stores.
I confess that I am a big fan of Greggs and its good-value offerings. This might be because my origins also lie in the North East of England, where I lived for the first five years of my life. However, as recent shareholders in this chain, we’re sitting on a significant paper loss. Disclosure: we bought our stake (not a steak bake!) for 1,683p a share on 2 July.
At their all-time high, Greggs share peaked at 3,443p on 30 December 2021. As I write, this stock trades at 1,415p, valuing this FTSE 250 firm at under £1.5bn — a far cry from its former high.
At its 2025 peak, the shares hit 2,890p on 8 January, but it’s been steeply downhill pretty much ever since. For the record, the share price is down 33.2% over six months and 47.7% over one year. It’s also almost halved this calendar year (-49.1%) and is down 18.5% over the past five years.
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Value trap or recovery play?
The collapsing Greggs share price means that it now trades on around 10 times earnings, delivering an earnings yield nearing 10%. Also, the plunging price has boosted the dividend yield to a tasty 4.9% a year. This payout is covered over two times by historic earnings, but retailers have been struggling since the summer.
To me, these fundamentals hardly look like those of a failing firm. Rather, I believe that this stock is firmly in bargain-bin territory and could be primed for recovery. Indeed, if I could buy this entire business at today’s market valuation, I wouldn’t hesitate to do so.
That said, my first foray into Greggs shares has been problematic. At present, we are nursing a 15.9% loss on paper, excluding cash dividends. To date, catching this falling knife has left my family with bloody fingers.
For now, things look gloomy for Greggs, with profits hit by slowing sales growth, higher employer National Insurance contributions, and lower margins. But this isn’t a rubbish business — in my view, it’s just going through some short-term wobbles.
In the long term, I expect sales growth and estate expansion to resume, lifting Greggs’ revenues, earnings, cash flow — and its share price. However, if chancellor Rachel Reeves unveils new business taxes in her Budget on Thursday, 26 November, then all bets are off!
