Shares in Greggs fell as much as 6 per cent yesterday after a report warned that weight-loss drugs could hit sales of its sausage rolls, steak bakes and other treats.
In a research note that made gloomy reading for the bakery chain, Jefferies analysts said the rise of fat jabs could hit demand among frequent customers.
Greggs is just the latest firm to be affected by GLP-1 weight-loss drugs such as Wegovy, Ozempic and Mounjaro.
Veteran fund manager Terry Smith last year dumped his stake in drinks giant Diageo, whose brands include Guinness, Smirnoff and Johnnie Walker, arguing that the rise of the drugs will hit demand for alcohol.
Cutting his rating on Greggs shares to ‘hold’ from ‘buy’ yesterday, Jefferies analyst Andrew Wade said: ‘We are increasingly of the view that the rapid uptake of GLP-1 weight‑loss drugs is impacting Greggs.’
He said the slowdown in sales over the past 18 months cannot be put down to weak consumer spending and unfavourable weather alone.
Fatty: Analysts fear weight-loss injections will hit sales of its sausage rolls, steak bakes and other treats
Noting that jabs reduce demand for salty and fatty foods in particular, Wade said they posed a ‘material threat’ to Greggs.
He added: ‘While the typical GLP‑1 demographic may only partially overlap with Greggs’ customer base, those affected
are likely to be higher‑BMI, higher‑frequency consumers – precisely the customers most valuable to Greggs.’
As such, Wade slashed the target price on the shares by about a third to 1610p.
Greggs shares eventually closed down 2.4 per cent, or 40p, at 1640p.
The stock has halved in value since peaking in late 2021.
Greggs chief Roisin Currie last month admitted customers are gravitating toward smaller portions and looking for more information on protein and fibre content.
She said the company is refining its offer to match. Set up in Newcastle in 1939, Greggs now boasts more than 2,000 shops across the UK.
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