Greggs‘ (LSE:GRG) shares haven’t been stellar performers in recent years, and even over the last 12 months the stock’s still down close to 19%. But last month something changed. The stock suddenly sprang back into life, climbing 18.5% across 5-27 May.
What happened? Is this just regular market volatility? Or could the long-awaited recovery finally have started?
Why the stock bounced
There are a few factors at play here. But the primary catalyst of the recent share price rally appears to have been driven by promising early green shoots in the company’s May trading update.
Across the first 19 weeks of 2026, management reported like-for-like sales growth landed at 2.5%. But when digging a bit deeper, what seems to have investors excited is that in the last 10 weeks of this period, this expansion had accelerated to 3.3%.
Obviously, neither of these figures come close to the double-digit growth rate Greggs’ previously enjoyed. But it’s the first sign of reacceleration investors have seen in years. And it signals that the group’s financials could be starting to ramp back up again.
At the same time, management’s continued making progress in its store rollout with 20 net new openings in the period. As such, the UK’s favourite bakery chain now has 2,759 stores under its umbrella, which gives it a much larger footprint to capitalise on future improvements in the economic landscape.
So with early signs of a potential turnaround now starting to materialise, should I be thinking about buying Greggs’ shares today?
Bull versus bear
As a long-term investor, it’s hard to ignore the firm’s powerful brand and successful product innovation. New product launches, extending evening trading hours, and delivery partnerships are all helping to broaden Greggs’ market opportunity beyond the traditional breakfast and lunch crowd.
However, while I’m optimistic for the long run, there are still some lingering questions and uncertainties about the near term. And while the recent rally does have some tangible fundamentals behind it, it’s possible that investors are being too optimistic too soon.
Consumers are still under a lot of pressure. And if disposable income remains tight, demand for impulsive or treat-style purchases could stay fragile. Greggs also remains heavily exposed to cost inflation, which is already squeezing margins.
In other words, even if sales pick back up, higher costs might hold earnings back. So what should investors make of all this?
What’s the verdict?
Weighing it all up, Greggs is definitely showing signs of genuine improvement. And the latest update gave investors a reason to be more optimistic about this well-known British brand.
For me, there remain a lot of lingering questions and challenges that the company has yet to answer or overcome. As such, personally I’m still staying on the sidelines. But nonetheless, I think investors should be watching very closely in the coming weeks.
Should you invest £5,000 in Greggs Plc right now?
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Zaven Boyrazian does not hold any positions in the companies mentioned.
