Greggs (LSE: GRG) Shares used to be a lot of fun. Investors were furious at FTSE250 shares and I made good money on it. However, the whole thing got out of control. Sales dropped and stocks went from red to frosty faster than you could say it to a vegan sausage roll. What went wrong?

The Newcastle-based bakery chain was once ridiculed for selling greasy British stodge, and then feted for the same reason. Thanks to a clever marketing campaign, the stores spread across the UK. Not only the main streets, but also shopping malls, railway stations and airports. It even benefited from the cost of living crisis as cheeky Greggs was seen as an affordable steal. But as we became poorer, the meteoric rise in sales slowed.

What happened to the booming FTSE 250 shares?

In the glory years, the share price was more frothy than a takeaway cappuccino. The price-to-earnings ratio (P/E) at one point exceeded 23. Today it is a different story. The Greggs share price has fallen 17% in the last year and 33% in five years. But hasn’t the discount been exaggerated?

To some extent, I think so. Greggs continued to report record sales in 2025, up 6.8% to £2.15 billion. This was driven by store expansion as the company added 121 novel locations, bringing its total number to 2,739. Comparable sales in company-operated stores increased by 2.4%, driven by evening openings.

However, underlying pre-tax profit fell 9.4% to £172m, while margins increased from 9.7% to 8.7%. This was due to inflation, increased investment in infrastructure and bad weather. So is this a chance for a cheaper entry?

Today, Greggs’ P/E sits at a lowly 12.6 and its dividend yield is a solid 4.55%. So yes, in some respects this looks like a buying opportunity worth considering. It should also be noted that the board has set a dividend for 2025 of 69 pence per share. This, of course, did not please investors.

However, anyone who thought they had found a bargain and sunk their teeth into Greggs shares a week ago will not be feeling too satisfied. They fell another 7% last week. This would reduce an investment worth £4,993 (after fees) to £4,643. A quick loss of £350.

Is the stock an irresistible opportunity?

It’s probably not the end of the world. No one should buy a stock with the intention of holding it for less than five years, and preferably much, much longer. So can Greggs bite back?

What it really needs is a full-blown economic revival and putting money into citizens’ pockets. Unfortunately, the UK seems to be a long way from this as petrol prices rise and inflation sets in. Greggs costs will rise and consumers will struggle. The margins could be compressed on both sides.

The upside is that it’s low-cost, pays a decent dividend and Greggs remains a well-run company and a fixture on the high street. The stock should do well over the long term, but I think it’s in for another tough year or two. There are plenty of bargain FTSE shares at the moment which I strongly prefer.