Greggs PLC (LSE:GRG) is gaining ground on its competitors even as its sales volumes disappoint, according to RBC Capital Market, which sees the current weakness as cyclical rather than structural.
The baker's recent trading update showed like-for-like sales growth of just 1.6% at the start of 2026, with pricing of around 4% implying volume declines of 2.5%.
That is a weak number in isolation, acknowledged analyst Ross Broadfoot, but the broader food-to-go market saw visit volumes fall 3.1% in 2025, meaning Greggs is actually taking share even as its own volumes slide. Furthermore, YouGov data shows it retains its position as the number one food-to-go brand for value with a widening gap over rivals.
The consumer backdrop remains the central problem. Broadfoot, who cut his price target on the baker but kept his 'outperform' rating, pointed to low confidence among lower-income shoppers, the potential for Middle East-driven energy price rises to squeeze discretionary spending further, and the knock-on effect on inflation and interest rates.
Greggs has some protection as its energy costs are hedged for 2026 and half of 2027.
On the question of GLP1 weight-loss drugs, Broadfoot was relatively relaxed, noting that research suggests the bulk of users are middle-class women in their 30s and 40s, which he said does not feel like the core Greggs customer.
The RBC analyst cut his price target from an implied higher level to 1,830p but said the return of enhanced shareholder returns from 2028, as capital expenditure falls sharply from its 2025 peak, gives the investment case a longer-term tailwind.