Feeling the chew: is Greggs on a roll or is its enlargement overbaked?

[ad_1] A n monumental carpet of pastry snakes its manner across the manufacturing facility. 4 enormous metallic urns of meat filling are ready to be added. Employees in hairnets and overalls buzz about, checking a manufacturing line that holds 4.5 tonnes of pastry at anybody time.

That is meals manufacturing on an industrial scale, designed to fulfill the UK’s seemingly insatiable urge for food for sausage rolls, vegan bites and different baked treats.

Each sausage roll or steak bake purchased at any of Greggs’s 2,675 UK retailers could have been produced and frozen at this plant in Newcastle upon Tyne, the corporate’s residence metropolis, earlier than being baked in retailer and served presumably lots of of miles away.

The dimensions could appear sufficient to fulfill demand – with luggage of flour weighing 16.5kg and brick-sized blocks of fats and margarine moved round by forklift truck – but the bakery chain is continuous to develop manufacturing.

The Newcastle website, which churns out the equal of 1m sausage rolls day by day, gained a fourth manufacturing line in 2024. Now, Greggs is getting ready to launch an automatic manufacturing website in Derby, adopted in 2027 by one other in Kettering, Northamptonshire. Its estimated capital expenditure in 2025 was £300m.

Behind the scenes on the Northumberland Avenue department of Greggs in Newcastle. {Photograph}: Mark Pinder/The Guardian The brand new factories are meant to assist the corporate attain its goal of three,500 shops throughout the UK – 800 greater than it operates at present.

After years of fast enlargement, Greggs’ dedication to maintain opening new branches, at the same time as like-for-like gross sales have fallen, has raised eyebrows amongst analysts and traders.

Mixed with a slide within the firm’s share value during the last yr, it has led some to ask: has the UK reached the restrict of its urge for food for Greggs?

Roisin Currie, Greggs’ chief government, insisted in any other case in July. “I completely don’t imagine we've reached peak Greggs,” she stated, including the corporate had beforehand bounced again from “downturns”.

Fiona Wilson and Keith Stewart go to Greggs in Newcastle two to 3 instances per week. {Photograph}: Joanna Partridge/The Guardian Others have their doubts, nevertheless. Analysts on the dealer Panmure Liberum stated the chain now “sits at a crossroads”.

Greggs continues to be held particularly esteem by individuals in its residence metropolis. On a cold December morning, when the Guardian visited the department in Newcastle railway station, clients have been queueing out of the door. The identical was true on the retailer outdoors the station.

Ready for a breakfast sandwich and a espresso have been Fiona Wilson and Keith Stewart.

“It’s excellent high quality espresso at an affordable value,” stated Stewart. Flashing her loyalty app and explaining she often visits two or thrice per week, Wilson added: “I really like the merchandise and like that it’s an area model.”

What would go on to grow to be Britain’s largest bakery chain began with one man and a dream. In 1939, John Gregg started delivering recent eggs and yeast to Newcastle households by bike. Simply over a decade later, he opened his first store promoting bread and baked items within the metropolis’s Gosforth district, the place the excessive avenue continues to be residence to a department of Greggs.

Gregg might hardly have predicted the corporate bearing his title would balloon over subsequent many years, showing from Elgin in Scotland to Truro in Cornwall, using 33,000 individuals.

The chain expanded by means of the 70s and 80s beneath the management of Gregg’s sons because it purchased up regional bakery chains. Its most up-to-date transformation got here within the 2010s, when the then CEO Roger Whiteside, Currie’s predecessor, determined to ditch conventional merchandise similar to loaves to deal with the food-to-go market.

An archive photograph of Greggs in Gosforth, Newcastle, displayed within the chain’s Christmas pop-up venue in Fenwick’s division retailer. {Photograph}: Mark Pinder/The Guardian The pivot was profitable and the chain gained a status for reasonable and dependable breakfasts and lunches as its emblem of 4 orange squares on a blue background popped up on ever-more excessive streets.

It reached the milestone of £1bn in annual gross sales in 2018 and launched a vegan sausage roll the next yr, changing into one thing of a phenomenon because it received plaudits for its lighthearted social media advertising and marketing.

Within the early 2020s, the pandemic however, loaf-free Greggs was on a roll. Currie adopted in Whiteside’s footsteps, providing menu objects similar to pizza and mac and cheese.

The corporate was profiled in a behind-the-scenes TV documentary and collaborated with different manufacturers, together with the finances clothes chain Primark, which launched a sell-out Greggs “competition put on” vary.

Gross sales stored rising like puff pastry in a sizzling oven, and by 2024 Greggs had doubled annual turnover to £2bn and opened its 2,600th department. On the similar time, shares within the FTSE 250 firm, which first listed in 1984, have been on a largely upwards trajectory.

It was in 2025 that Greggs appeared to falter.

Early on, bosses blamed wintry climate for the corporate’s worst gross sales progress because the pandemic. A summer time of heat temperatures and sunshine diminished clients’ urge for food for pastry, leaving analysts and traders questioning the model’s course because it continued to focus on 120 internet retailer openings in 2025.

Greggs’ share value has fallen by about 40% over the previous yr, and it ended 2025 because the most-shorted inventory within the UK as individuals positioned bets that its worth would fall additional nonetheless.

An activist investor – the Singapore-based hedge fund Lauro Asset Administration – lately criticised the corporate’s administration, urging it to chop prices to keep away from changing into a takeover goal.

Others ponder whether the chain can maintain progress by means of new department openings, which might merely transfer present clients round in the event that they show to be too near present websites.

Peter Backman, a restaurant guide, drew a comparability to the rival chain Subway, which he stated had “round 2,000” branches, “so Greggs are most likely close to the restrict”.

He added: “It will likely be a couple of years till they attain the utmost variety of shops. Nevertheless, there are different points, and the quantity of people that go to their shops isn’t essentially going to go up.”

Greggs on Gosforth excessive avenue in Newcastle at present. {Photograph}: Mark Pinder/The Guardian Given its very British proposition, enlargement abroad appears unlikely. A earlier five-year try to woo Belgian customers failed and the chain closed its “Engelse Bakker” (English baker) shops in 2008.

Customers stay delicate to cost will increase, too, at the same time as inflation has cooled. The sausage roll that value 66p in 2012 has now doubled to £1.30 in Newcastle metropolis centre, although costs can fluctuate relying on location.

Greggs has raised costs “forward of the market”, in response to analysts on the dealer Jefferies. It discovered the chain’s sandwiches value 6% extra in October 2025 than a yr earlier, whereas key sizzling objects have been 4.5% pricier – although it concluded “pricing continues to be sharp”.

Naomi Watson on the pop-up Golden Flake Tavern in Newcastle’s Fenwick division retailer. {Photograph}: Mark Pinder/The Guardian Others have queried whether or not wider uptake of weight-loss jabs might additional knock gross sales of calorific pastries, although the corporate has been introducing more healthy choices, together with fruit pots and salads.

At a time when some imagine it ought to deal with its core enterprise, Greggs continues to check out new codecs, similar to smaller retailers in excessive footfall areas. The primary of those “Bitesize Greggs” opened in Sevenoaks railway station in November.

Earlier than Christmas, the chain launched its annual pop-up venue – this time a “Greggs pub” inside Newcastle’s Fenwick division retailer. Regardless of significantly increased costs – £12.50 for a steak bake served with egg, chips and tomato – the Golden Flake Tavern has been booked out with clients eager to get pleasure from Greggs’ best-known merchandise in a traditional-looking boozer.

Naomi Watson and her mum described the plates of sausage roll, gravy and mash (£9) and mac and cheese bites (£4.25) on the pop-up as “excellent”. Though they might not often describe themselves as “Greggs individuals” given the “lack of salad” on supply, the pair thought the pub go to could be “a enjoyable day trip”.

Greggs will reveal on 8 January what number of festive bakes and mince pies it bought within the remaining quarter. Dan Coatsworth, the top of markets on the dealer AJ Bell, stated the announcement could possibly be essential for the long run course of the corporate.

“Greggs is at a large strategic turning level and the bosses must do one thing,” he stated. “Banging the drum saying nothing is fallacious isn't reducing the mustard. What’s fallacious with doing what you do now and doing it rather well?”