Britain's beloved bakery chain Greggs is pushing ahead with ambitious plans to open 800 new shops and build two automated factories, even as its sales growth stutters and its share price tumbles. The strategy has left industry analysts questioning whether the UK has finally reached 'peak Greggs'.
A Recipe for Growth Amid Falling Sales
The scale of Greggs' current operation is staggering. At its Newcastle heartland, a flagship factory produces the equivalent of one million sausage rolls every single day. A fourth production line was added in 2024 to feed the nation's demand. Yet, despite this industrial output, the company is not slowing down. It has earmarked £300 million in capital expenditure for 2025 to fund a new automated site in Derby and another planned for Kettering in 2027.
These facilities are central to Greggs' goal of expanding from its current 2,675 outlets to a network of 3,500 stores across the UK. However, this relentless drive for growth comes at a tricky time. Like-for-like sales fell in 2025, initially blamed on poor weather, then on a sun-drenched summer that dampened appetites for hot pastries. The company's share price has fallen by approximately 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 is a classic British tale. It began in 1939 when John Gregg delivered eggs and yeast by bicycle in Newcastle. His first shop opened in the city's Gosforth district in the 1950s. Decades of acquiring regional bakeries and a pivotal shift in the 2010s under former CEO Roger Whiteside transformed it. The chain ditched loaves to focus on food-to-go, launching now-iconic items like the vegan sausage roll and mastering witty social media marketing.
This strategy propelled annual sales past £2 billion by 2024. Under current CEO Roisin Currie, the menu has broadened to include pizza and mac and cheese, and the brand has collaborated with names like Primark. In Newcastle, loyalty remains strong. "It's very good quality coffee at a reasonable price," said local customer Keith Stewart, while Fiona Wilson, a regular visitor, praised it as a "local brand."
Challenges on the Horizon
Despite this local affection, significant challenges loom. Analysts at Panmure Liberum say the chain "sits at a crossroads". Activist investor Lauro Asset Management has criticised management and urged cost-cutting. Others question if new store openings simply cannibalise existing sales. Restaurant consultant Peter Backman compared Greggs' potential store count to Subway's, suggesting the UK market may be nearing saturation.
Further pressures include consumer sensitivity to price hikes—a sausage roll has doubled in cost since 2012—and broader trends like the uptake of weight-loss medications. Overseas expansion seems unlikely after a failed venture in Belgium. In response, Greggs is experimenting with smaller 'Bitesize' formats and novel pop-ups like the festive 'Golden Flake Tavern' pub in Newcastle's Fenwick store.
All eyes are now on the company's trading update due on 8 January, which will reveal festive sales figures. Dan Coatsworth of AJ Bell called it a crucial moment: "Greggs is at a massive strategic turning point... What's wrong with doing what you do now and doing it really well?" While CEO Roisin Currie insists the UK has not reached 'peak Greggs', the coming year will be a true test of the bakery giant's resilience and direction.
