The increasing use of weight loss injections could dampen demand for sausage rolls and pastries at Greggs, potentially depriving the bakery chain of some of its most lucrative customers, City analysts said.
The warning comes as Greggs continues to struggle with slower sales growth since mid-2024, a period that has led to speculation among investors about whether the UK has reached the “Greggs peak”. The company attributes its weaker performance to weak consumer confidence and last summer’s unseasonably hot weather, which led to a decline in foot traffic, while some shareholders questioned whether rapid store expansion has begun to cannibalize like-for-like sales.
Analysts at Jefferies have now added another potential headwind: the increasing popularity of weight-loss drugs like Mounjaro and Wegovy. In a note to clients, the broker said the trend could pose a “persistent challenge” for Greggs and weigh on its longer-term growth prospects.
The drugs work by mimicking the hormone GLP-1, which suppresses appetite and increases feelings of satiety. Jefferies pointed to US studies that suggest users of such treatments tend to cut back on high-calorie, highly processed savory foods in particular, a category that includes many of Greggs’ core products.
Analysts estimate that up to four million people in the UK are now using vaccinations to lose weight, representing around 7.5 per cent of the adult population.
“Potentially only 10 percent of GLP-1 users would shop at Greggs,” the Jefferies team said. “But that 10 per cent would be people with high BMIs who consume a lot of calories and we would conclude that they are likely to be some of Greggs’ best customers. These customers could go from being the most valuable customers to those who may never spend a penny with the company again.”
Roisin Currie, chief executive of Greggs, admitted last month that there was “no doubt” that weight loss injections were having an impact on consumer behavior. In response, the chain has begun expanding its healthier range, including products such as egg pots, to reflect changing preferences.
Despite these efforts, Jefferies said the proliferation of weight-loss drugs should be viewed as a “structural problem” rather than a passing trend. The broker cut its forecasts for Greggs’ like-for-like sales growth and profit margins and downgraded the stock to “hold” from “buy”, underlining the growing uncertainty facing one of Britain’s best-known high street brands.
