Judging by the readership numbers we Fool writers see, many investors are highly interested in Greggs (LSE: GRG) shares and their movements. Even so, apologies for the brutal pun in my headline, which I simply couldn’t resist!

Alas, the Greggs share price has collapsed like a soggy soufflé since the big surge of summer 2024. This long-established business — built on an expanding estate and strong sales growth — is now struggling to grow. What might turn this tanker around?

Greggs shares slide

At its all-time high, this FTSE 250 stock peaked at 3,443p on 30 December 2021. It then zigzagged for years, before rising to hit 3,250p in September 2024. However, it’s been pretty much all downhill since, with the stock bottoming out at 1,407.2p on 25 November 2025.

As a value investor, I seek under-priced shares in decent companies. Greggs shares appeared on my radar on 1 July, when they slumped by 15%, down 300p that day. I pounced, buying a stake (but not a Steak Bake) for 1,696.7p a share.

Greggs’ challenges

In 2024/25, Greggs’ business model faced a number of setbacks. First, the rapid uptake of GLP-1 weight-loss drugs in the UK reduced demand for cheap, filling ‘food on the go’. Second, its store rollout slowed down, with around 2,650 active outlets. Third, the cost-of-living crisis has left British shoppers with less money to spend.

In addition, Greggs costs are soaring. This follows steep increases in the National Minimum Wage, higher employer National Insurance contributions, and soaring energy bills. In short, this Newcastle-based bakery chain’s profits and margins are being squeezed hard.

Will the good times (sausage) roll?

As I write, the Greggs share price stands at 1,653p, valuing this group at £1.7bn. The shares trade on 13.9 times trailing earnings, delivering an earnings yield of 7.2%. This means that the market-beating dividend yield of nearly 4.2% a year is covered over 1.7 times by historic earnings.

These resemble the fundamentals of a classic value stock. But further corporate weakness might turn this potential recovery play into a value trap. Even so, with Greggs shares trading at levels first seen seven years ago, I have no intention of selling our holding.

Then again, it’s worth noting that Greggs is the most shorted stock in the London stock market. Over 14.5% of the shares have been borrowed and sold, generally by professional investors (such as hedge funds) betting they will fall.

Finally, with Greggs’ profits expected to be flat this year, I’m not expecting miracles from this stock. My main concern would be if the group cuts its tasty dividend to shareholders. Meanwhile, I await the next trading update on 12 May…