$GRG (-2,49%) No investment advice. At your own risk and peril.
I was in London for the first time, hungry and a bit lost between red buses and crowds of people. Suddenly I saw a sign: Greggs.
At first I thought it might be a smart men's tailor or a pub with Victorian flair.
Curious, I went in and instead of suit fabrics or whisky, I was greeted by the smell of warm pastries.
Five minutes later I was standing outside with a steaming sausage roll in my hand while Big Ben chimed somewhere in the distance.
So began my great London love story, not with tea and scones, but with puff pastry and sausage.
Greggs - British cult, global opportunities, timeless moat
1st rating to bite into
- Operating profit: ~£300m
- Market capitalization: ~£1.62bn
- Multiple: ~5.4x operating profit - well below industry average (10-15x).
- → Even a moderate revaluation could increase the share price by +100% without additional earnings growth.
2. the moat - why Greggs is hard to copy
Greggs is not simply a "bakery concept" that can be quickly replicated. The competitive advantage runs deep:
- Vertical integration: Own production, logistics and store network - full cost control, rapid product innovation.
- Brand love: Built up over decades - emotional customer anchor in the UK, similar to Starbucks in the US.
- Location network: 2,500+ stores in high frequency locations - new competitors struggle to find comparable space.
- Price leadership in quality: Perfect balance of low prices and consistent product quality.
3. growth story with imagination
- UK expansion to 3,000+ locations
- Evening business & longer opening hours → More sales per store
- Digital offensive: App, Click & Collect, delivery services
- International expansion in the pipeline - initial market exploration underway
- → Bacon rolls in Paris? Sausage rolls in Sydney? The foundations have been laid.
4. risks? Yes - but temporary.
- Extreme weather (heat, snow) slowed sales in 2025 - not a structural threat, but short-term natural events.
- Inflation-related cost increases - are cushioned by price adjustments and efficiency measures.
- "Peak Greggs" debate - Expansion into new formats & markets shows that the limits to growth are far from being reached.
5. why get in now?
- Massively undervalued With solid earnings profile
- Strong brand + deep moat = sustainable competitive advantages
- Healthy balance sheet
- Temporary headwinds create a favorable entry point
- Undiscovered by the market
Greggs provides us with the perfect recipe: Moat + favorable valuation + growth fantasy.
My first tranche is in.
Anyone up for selling a few bacon rolls with me? 🥓🫓🥯