Shares in Greggs PLC fell almost 5% after Jefferies warned that the baker is trying to push its sausage rolls into a growing headwind.
Analysts argue that the biggest threat to sales volumes of its meat pastries is increasingly pharmaceutical rather than the meteorological ones that have been blamed in the past year.
This is from the rapid spread of appetite-suppressing injections such as tirzepatide (Mounjaro and Zepbound) and semaglutide (Ozempic and Wegovy), which are now estimated to be used by about 7% of UK adults.
Growing use of weight-loss drugs is changing how Britain eats, with categories most affected being the exact sort of savoury, salty and high-calorie snacks the Newcastle-headquartered chain specialises in.
For a business built on repeat visits from hungry customers, that is a slimming prospect Jefferies thinks the market has not fully digested, the broker said, downgrading the baker to 'hold' from 'buy'.
This follows a challenging 18 months, with like-for-like sales weakening steadily since mid-2024 and customer volumes slipping into negative territory, with management pointing to poor weather and softer spending.
But Jefferies analyst Andrew Wade thinks that does not fully explain the scale or persistence of the slowdown.
Instead, he warns that the rapid uptake of GLP-1 weight-loss drugs has "become a structural headwind" for Greggs.
While not all Greggs customers overlap with GLP-1 users, those who do are likely to be higher-frequency visitors, so losing them hurts volumes disproportionately.
As a result, Wade has cut his assumptions for sales growth and margins and lowered its price target sharply.
Greggs is still seen as a high-quality operator with a strong brand and long runway for new shops, but the days of easy volume growth, it suggests, may be slimming down.
The shares fell 4.9% to 1,599p in trading on Monday morning.
The downgrade also sits within a more cautious view of the wider UK retail backdrop, with Wade and colleague Grace Gilberg expecting 2026 to be "steady, if unspectacular" for non-food retail, with sales growth of about 2% and earnings growth closer to 3%.
Christmas trading was marginally more positive than negative, suggesting resilience rather than distress, but the broker argues that stock selection matters more than macro.
Top picks are AO World, Wickes, and Moonpig, where Wade says each combines "structural drivers with clear evidence of execution momentum": AO has rebuilt profitability and top-line momentum via its membership‑led ecosystem.
Wickes, meanwhile, is leveraging a differentiated offer, and Moonpig is pairing resilient cash generation and a host of self-led levers.