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Is Greggs a worthwhile investment?🥧

Analysis written by Vinay Soni

Gregg's is a bakery chain known throughout the UK for its delicious and affordable pastries and treats. They’ve grown from a single shop to over 2,300 locations across the UK, offering tasty and convenient food on the go. They're known for their commitment to fresh ingredients and community involvement, making them an interesting investment choice. This article will explain why maybe Greggs may be a worthwhile investment in 2024

Greggs has come a long way from the slightly tired northern bakery cliché. It’s a real staple across the UK and you can always find one/multiple in town centres and retail parks. Greggs currently offers a 2.7% dividend yield which is attractive to investors. Greggs was strategic in these locations to capture regular footfall by acting as convenient locations for busy Brits. Greggs weathers the volatility of the retail market by making a conscious effort to increase outlets in known travel stations like motorway services, train stations and coach stations. In fact, Greggs is set to hit 3,000 stores in a few years. Furthermore, Gregg's offering affordable on-the-go food during an “inflation”-crisis (rising costs) makes them especially attractive in an economic downturn and their revamped menu/growing delivery options allow them to hoover up recent trends of veganism, healthy eating and food delivery.

Due to these reasons, Greggs is estimated by Hargreaves Lansdown equity research analysts that Revenue is projected to rise by 18%, coming a long way since facing the COVID-19 retail market volatility.

However, there are a few drawbacks. Greggs does deal with 9% cost inflation squeezing their profits; this may affect the usual trajectory of rising operating profit. Furthermore, the fast-food market is always very competitive with rivals competing over popular locations and constantly trying to meet the healthy eating trend which could cause headwinds for Greggs if they don’t keep up.


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