How tasty has the return been for investors in Greggs (LSE: GRG)? Over the long term, Greggs shares have performed solidly. Lately, though, they have been disappointing.

Over the past year, for example, the share price has fallen by 10%. That means that someone who put £15,000 into Greggs shares 12 months back would now be sitting on a shareholding valued at £13,500. That equates to a paper loss of £1,500.

Still, it also means that the share might now be more of a bargain than a year ago, depending on what one thinks about Greggs’ business prospects.

An air of uncertainty

Why do I say “might”?

The share price is lower: that is a fact. But whether it is more of a bargain than a year ago depends not only on the price, but also on the business prospects. Those are a matter of judgement, not simply facts.

The fall in price reflects investor concerns that the business outlook is not as good as it was before.

Such pessimism is understandable: an unexpected profit warning last summer highlighted that Greggs was not properly prepared for a spell of warm weather. This year has been wet, but changeable weather remains a risk — even a sudden heatwave!

Other risks are also clouding the outlook, too.

Greggs’ growth opportunity seems to be getting smaller, as the company already has over 2,700 shops. Still, it reckons the UK could support significantly over 3,000 in the long term.

Another risk is rising wage and tax costs. They help explain last year’s 18% fall in statutory profit.

That fall in profit has been faster than the share price drop over the past 12 months. That could suggest that, rather than being more of a bargain than a year ago, Greggs shares are actually less of a bargain now than then, as they trade on a higher price-to-earnings ratio.

Here’s why I’m still upbeat about this UK share

But earnings can move around for better as well as for worse – and I am hoping that they will do.

That ongoing expansion of the shop estate will hopefully enable Greggs to realise greater economies of scale over time.

Given its competitive pricing, I think it has at least as much if not more scope than many rivals to pass on tax increases through its pricing without necessarily hurting sales volumes. People need to eat – and Greggs’ value proposition for its customers remains difficult to beat.

With a strong brand, some unique products, and a considerable level of customer loyalty, I think Greggs should be able to keep growing. Last year saw profits fall, but sales growth of 7% was still impressive in my view.

In fact, I continue to see Greggs shares as a potential bargain from a long-term perspective at the current price.

While someone who invested £15k a year ago would be sitting on a paper loss, they ought to have earned around £558 in dividends over 12 months.

The current dividend yield of 4.1% is attractive to me. As a shareholder, it means I can hopefully earn ongoing passive income while hanging onto the shares in the hope of long-term price growth.