The FTSE 250 stock has gained 40% over the past six months. Should I buy now?

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Greggs (LSE: GRG) is a popular high-street bakery that had a strong run in January and plans to expand further this year. After a tumultuous 12 months, will his FTSE 250 stock get back on track?

Greggs confirmed a strong 18.2% increase in sales in the final quarter of 2022, with festive specials such as mince pies and caramel lattes becoming popular. Underlying sales are up year-on-year, and the chain plans to expand, with ambition to open 150 more stores in 2023.

Nevertheless, Greggs faced some significant challenges over the past year. In the aftermath of the pandemic, problems such as supply shortages, rising energy prices and management changes remained. And this is likely to continue for the foreseeable future.

focus on value

Chief Executive Roisin Curry, who took over as president in May 2022, acknowledged a 9% rise in costs as a driver of higher prices for popular items such as sausage rolls. Currie cited value for money as a key factor for customers during the cost of living crisis. Many factors contributed to the strong growth in the first update in 2023, including longer trading hours, better availability of digital channels and more choice.

Even while the cost of living crisis continues, Greggs seems to have a lot of potential.As a cheaper alternative to high street regulars like Costa and Pret, Greggs can win over customers looking to save money. The newly introduced “Double Up Deal” encourages a customer to trade up so he buys two items.

Greggs has also been able to steal the march of its competitors with its diverse range.Who can forget the impact that 2019’s vegan sausage rolls had on profits? The vegan sausage, bean & cheese melt, which relaunched in February, is also a strong contender for increased sales.

main street

With the introduction of 11 new lines and powerful plant-based products, Greggs will certainly appeal to a wider customer base. anyway, eat The partnership allows Greggs to be considered a low-cost, easy treat.

Interestingly, a little-reported development could have a radical shift in Greggs’ bottom line. A judge has dismissed Zurich’s Covid-19 business interruption limit with his corresponding limit of £2.5m. The ruling said there were multiple interruption losses, each capped at his £2.5million. Due to the ruling, Greggs is likely to receive a large payment in due course.

Despite the recent surge in share price, I think Gregg’s still has a lot of growth potential and is one of the few high street chains that do well in the current economic environment.Not invested at this time, but strongly considering add this stock to my retail portfolio.

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