Britain's favourite bakery chain, Greggs, is pushing ahead with ambitious plans to open 800 new shops and build two automated factories, even as its sales growth falters and its share price tumbles. The company, founded in Newcastle in 1939, now faces critical questions over whether the UK has reached 'peak Greggs'.
A Recipe for Expansion Amid Falling Sales
The scale of Greggs' current operation is vast. At its Newcastle factory, a production line holds 4.5 tonnes of pastry at any one time, churning out the equivalent of one million sausage rolls every single day. Despite this, the FTSE 250 firm is investing heavily in growth.
It opened a fourth production line in Newcastle in 2024 and is preparing new automated sites in Derby and Kettering, with the latter due in 2027. The company's estimated capital expenditure for 2025 was £300 million, all aimed at supporting a target of 3,500 stores nationwide – a significant jump from its current 2,675 outlets.
This determination comes as the chain's financial performance shows signs of strain. Like-for-like sales fell in 2025, initially blamed on wintry weather and later on a sunny summer which dampened appetite for hot pastries. The company's share price has fallen by about 40% over the past year, making it the most-shorted stock in the UK by the end of 2025.
From Humble Beginnings to High Street Phenomenon
The story of Greggs began with John Gregg delivering eggs and yeast by bicycle in Newcastle in 1939. His first shop opened in the city's Gosforth district in the 1950s. The chain grew through acquisitions in the 70s and 80s before a pivotal shift in the 2010s under then-CEO Roger Whiteside.
Ditching traditional loaves to focus on food-to-go, Greggs became a phenomenon. It hit £1 billion in annual sales in 2018, launched a wildly popular vegan sausage roll, and mastered social media marketing. By 2024, annual turnover had doubled to £2 billion.
Current CEO Roisin Currie, who took over from Whiteside, has continued to innovate, adding pizza and mac and cheese to the menu and experimenting with new formats like 'Bitesize Greggs' in railway stations.
Analysts and Investors Voice Their Doubts
Despite Currie's insistence that the company has not reached its peak, analysts are sounding caution. Broker Panmure Liberum stated Greggs "sits at a crossroads". Activist investor Lauro Asset Management has criticised management and urged cost-cutting to avoid a takeover.
Restaurant consultant Peter Backman drew a comparison to Subway, suggesting Greggs, with its planned 3,500 stores, may be nearing the UK's saturation point. "It will be a few years until they reach the maximum number of stores," he noted, adding that footfall may not necessarily increase.
Other challenges loom. Consumers remain price-sensitive, with the iconic sausage roll now costing £1.30 in Newcastle, up from 66p in 2012. Some also question whether wider use of weight-loss jabs could impact sales, though Greggs has added healthier options like salads and fruit pots.
The Newcastle Heartland and Future Experiments
In its home city, loyalty remains strong. On a December morning, queues stretched out the door at the Newcastle railway station branch. Regular customers Fiona Wilson and Keith Stewart, who visit two to three times a week, praised the quality, value, and local brand identity.
Greggs continues to test novel concepts, like the Christmas pop-up 'Golden Flake Tavern' in Newcastle's Fenwick department store, where a steak bake with egg and chips cost £12.50. While successful as a novelty, such experiments highlight the brand's search for new growth avenues, given that overseas expansion has previously failed in Belgium.
All eyes are now on the company's trading update due on 8 January, which will reveal festive sales of mince pies and Festive Bakes. Dan Coatsworth of AJ Bell called this a crucial moment, stating "Greggs is at a massive strategic turning point". The coming months will determine if the nation's bakery giant can continue its roll, or if its expansion has been overbaked.
