Judging by the readership numbers Stupid Writers sees, many investors are very interested in it Greggs (LSE:GRG) stocks and their movements. However, I apologize for the harsh pun in my title, which I simply couldn’t resist!

Sadly, the Greggs family share price has collapsed like a soggy soufflé since the big rally in the summer of 2024. This well-established business – built on an expanding estate and strong sales growth – is now struggling to grow. What could capsize this tanker?

Greg’s stock slides

At an all-time high, this FTSE 250 index The stock peaked at 3,443p on December 30, 2021. It then limped for years, before rising to a high of 3,250p in September 2024. However, the stock has fallen considerably since then, with the stock bottoming at 1,407.2p on November 25, 2025.

As a value investor, I seek out stocks at lower prices in respected companies. Greggs shares came on my radar on July 1, when they fell 15%, or 300p, that day. I swooped in and bought a share (but not a steak) for 1,696.7 pas per share.

Greg’s challenges

In 2024/25, Greggs’ business model faced a number of setbacks. Firstly, the rapid uptake of GLP-1 weight-loss drugs in the UK has led to a decline in demand for cheap, filling ‘junk food’. Second, its store rollout has slowed, with about 2,650 active outlets. Third, the cost of living crisis has left British shoppers with less money to spend.

In addition, Greggs’ costs are rising. This follows sharp increases in the national minimum wage, higher employer National Insurance contributions and rising energy bills. In short, the Newcastle-based bakery chain’s profits and margins are under severe pressure.

Will the good times (sausage) roll by?

At the time I write this article, Greggs’ share price stands at 1,653p, valuing this group at £1.7bn. Shares trade on trailing earnings of 13.9 times, providing a dividend yield of 7.2%. This means that the market-beating dividend yield of about 4.2% per year is more than 1.7 times covered by historical earnings.

These are similar to the basics of classic value stocks. But further corporate weakness could turn this potential recovery game into a value trap. However, with Greggs shares trading at levels seen for the first time in seven years, I have no intention of selling our holdings.

Then again, it’s worth noting that Greggs is the most shorted stock on the London stock market. More than 14.5% of the shares were borrowed and sold, generally by professional investors (such as hedge funds) betting that they would fall.

Finally, with Greggs’ earnings expected to be flat this year, I’m not expecting miracles from this stock. My main concern would be for the group to cut its delicious dividend to shareholders. Meanwhile, I wait for the next trading update on May 12th…