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Greggs Stock Plummets Amid Diet Drug Fears
10 Feb
Summary
- Weight-loss drugs may reduce demand for Greggs' popular items.
- Analysts warn GLP-1 drugs pose a material threat to Greggs.
- Greggs shares fell significantly due to these concerns.
Shares in Greggs experienced a significant decline, with a drop of up to 6 percent, following a report from Jefferies analysts. The analysts expressed concern that the increasing popularity of GLP-1 weight-loss drugs could negatively impact sales of the bakery chain's popular items like sausage rolls and steak bakes.
These drugs, including Wegovy, Ozempic, and Mounjaro, are noted for reducing cravings for fatty and salty foods. Analysts believe this poses a material threat to Greggs, particularly as the demographic most affected by these drugs often includes higher-BMI, frequent consumers who are valuable to the company.
This situation has led to a slashed price target for Greggs shares, which closed down 2.4 percent at 1640p. The stock's value has decreased by half since its peak in late 2021. In response, Greggs is reportedly adapting its offerings to align with customer trends towards smaller portions and increased interest in protein and fiber content.
