Sausage Roll Saturation? Analysts Question Greggs’ Expansion Drive

Once the darling of Britain’s high street, Greggs is now facing serious questions about its pace of growth, profitability, and whether the nation’s appetite for sausage rolls has finally hit its limit. As closures mount and expansion slows, analysts and investors are asking: Have we reached peak Greggs?

Net Growth, But at a Cost

While 87 new shops opened, 56 closed—including 27 relocations—resulting in just 31 net new sites. This marks a 40% reduction in net growth compared to the same period in 2024. With the estate now at 2,649 stores, Greggs remains committed to its long-term target of “significantly more than 3,000” UK sites. Yet, investors are beginning to question whether the chain has already reached a saturation point.

The closures are notable not just for their volume, but for what they signal: a possible strategic slowdown. According to Greggs, the company is “targeting a disciplined estate expansion,” a clear pivot from its previously relentless growth.

Profit Slips, Footfall Falters

Despite a 7% rise in total sales, pre-tax profits fell by 14% to £63.5 million, down from £74.1 million in the first half of 2024. The firm attributed this to “challenging market footfall, more weather disruption than in 2024, and phasing of cost headwinds.” Like-for-like sales rose 2.6% in company-owned shops and 4.8% in franchises, indicating resilience, but not at a pace that reassures.

eToro market analyst Mark Crouch noted, “Greggs has long been a reliable read on the UK high street. Its sudden stumble suggests consumers may not just be cooling on sausage rolls, but that appetite across the high street may be waning more broadly.”

Even as inflation eases and real wages recover, the disconnect between improving macro conditions and Greggs’ declining profitability has raised red flags among investors and analysts alike.

Growth Hangover or Just a Breather?

The sentiment that Britain has reached “peak Greggs” has gained traction, especially following a provocative Financial Times article. With more than one in five stores located within 500 metres of another, some investors believe the expansion strategy has become overzealous. One former stakeholder remarked, “People feel they have stuffed themselves with enough Greggs for the time being.”

Greggs has poured over £240 million into new automated production hubs in Derby and Kettering, and expanded facilities in Newcastle. While this forward investment in supply chain infrastructure indicates a company building for tomorrow, there’s growing debate over whether these outlays will be met with sufficient demand.

Strategic Shift or Momentary Setback?

Chief Executive Roisin Currie remains bullish, stating: “Through our disciplined estate expansion and focus on innovation, Greggs is evolving its offer further and making the brand more convenient for a wider range of customers. The outlook for cost inflation is unchanged, and we are making great progress in building the supply chain infrastructure that will support the next phase of growth.”

However, voices like Jules Hull of Dragoneye Research argue that Greggs’ recent attempt to “be all things to all people”—such as custom sandwiches and pizza slices—may have compromised its simplicity and margin.

The company’s diversification once worked wonders, particularly with the viral success of the vegan sausage roll in 2019. Yet gimmicks like Greggs-branded apparel in partnership with Primark drew scepticism from long-term investors, with some interpreting it as the first signal of brand overreach.

The Road Ahead

Short sellers are circling, with data showing a tenfold increase in Greggs’ shares out on loan in recent months. At the same time, opportunistic investors like Aberdeen’s Wes McCoy see value in the dip, describing Greggs as “a serious, well-focused, well-run machine.”

Still, future growth in the range of 3–4% will pale in comparison to the double-digit boom years. Analysts like John Stevenson of Peel Hunt caution that “peak Greggs is gone,” while others stress the company must focus on refreshing its ageing estate and simplifying its offer.

For now, Greggs continues to walk a delicate line between bold ambition and sustainable performance. Whether the latest figures mark a stumble or a strategic recalibration remains to be seen—but one thing is clear: the high street favourite is at a crossroads.