Shares in Greggs slid by as much as 6 per cent yesterday after analysts warned that the growing popularity of weight-loss drugs could dent demand for its best-known products, including sausage rolls and steak bakes. In a downbeat research note, Jefferies said the rapid take-up of so-called fat jabs may be weighing on sales, particularly among the bakery chain’s most loyal customers.
Greggs is the latest business to be caught up in investor concerns around GLP-1 drugs such as Wegovy, Ozempic and Mounjaro. The impact of these treatments is already being felt elsewhere, with veteran investor Terry Smith having sold his stake in drinks group Diageo last year, citing fears that alcohol consumption would fall.
Jefferies analyst Andrew Wade downgraded Greggs to ‘hold’ from ‘buy’, arguing that slowing sales over the past 18 months cannot be explained by weaker consumer spending or poor weather alone. He said appetite-suppressing injections reduce cravings for fatty and salty foods, posing a “material threat” to Greggs’ core offer.
While the overlap between GLP-1 users and Greggs customers may not be complete, Wade noted that those most affected are likely to be higher-BMI, high-frequency shoppers — the chain’s most valuable audience. As a result, he cut his target price by around a third to 1610p. Greggs shares later closed down 2.4 per cent at 1640p, having halved since their 2021 peak.
