The last 18 months have been a rough time to be a Greggs (LSE:GRG) shareholder.

While still the most popular bakery chain in Britain, Greggs has been hit by a combination of higher input costs, lower consumer spending, and challenging weather conditions all at the same time. The result? A near-50% collapse in its share price since September 2024.

But this isn’t the first time the sausage-roll maker has had to struggle through adverse market conditions. So far, the business has used its cash-generative operations to fuel an eventual comeback. And with its latest quarterly results showing sales growth heating back up, the next rebound may already be under way.

So, if we are indeed at the beginning of Greggs recovery, how much money would a £5,000 investment today potentially make?

Crunching the numbers

Back in September 2024, the stock hit a high of 3,250p per share. Today, Greggs is trading closer to 1,620p. So, if the stock goes on to deliver a full recovery to 2024 levels, that represents a 100.62% return. In other words, a successful rebound could transform £5,000 into a little over £10,000. And that’s before counting dividends.

So, now the question becomes, what needs to happen for investor sentiment to be restored and for Greggs shares to change direction?

Recovery requirements

As previously mentioned, revenue is beginning to reaccelerate, growth reaching 7.4% in the fourth quarter of 2025. However, most of this actually came from new store openings, with existing Greggs locations only contributing 2.9% sales growth.

By comparison, back in 2024, like-for-like revenue growth was closer to 8%. So, how can this rate of expansion be achieved again?

One tactic that management has been trying is product innovation. By introducing new items that resonate with shifting consumer tastes, footfall to Greggs stores can be encouraged.

The firm has already been using this strategy to varying degrees of success. However, it’s difficult to judge strategic effectiveness in an economic backdrop that discourages discretionary consumer spending. And management has made it clear that any like-for-like improvement is “contingent on a recovery in the consumer backdrop.”

Is a recovery likely?

It’s no secret that UK economic conditions are far from ideal. However, despite the depressing narrative often discussed in news headlines, some encouraging signs of improvement have actually started to emerge.

For example, the GfK Consumer Confidence index has been on a slow but upward trend and now stands at its highest level since August 2024. At the same time, UK retail sales volumes outperformed expectations throughout December while inflation forecasts point towards CPI easing back towards 2% throughout the rest of 2026.

To be clear, the economic landscape remains weak. But things are nonetheless starting to move in the right direction. Does that mean Greggs is on track to recover this year?

It’s certainly possible. But looking at the current trends, it seems 2026 is more likely to be a year of stabilisation, with a recovery seemingly more likely as of 2027 onwards.

Therefore, with management seemingly at the mercy of external market forces, it may still be a bit too early to start snapping up Greggs shares. But this is definitely a business I think investors should watch closely in 2026. And it’s not the only potential recovery opportunity I’ve got my eye on right now.