Greggs‘ (LSE: GRG) shares are up almost 16% since their 52-week low of £14.18, with a swathe of exciting new menu items helping pull it out of the slump.

Sales momentum is clearly improving, and the return of the Red Pepper, Feta and Spinach Bake is just one of several moves designed to win back customers.

But is a menu makeover enough to keep the shares afloat amid an ongoing energy crisis?

What’s driving the uplift?

Greggs points to product change and better store performance. Total sales in the first 19 weeks of 2026 rose 7.5% year-on-year to £800m, with like-for-like sales up 2.5% over the same period.

“LFL sales performance has improved against what remains a challenging market”, management said in its trading update, noting operational cost control has supported profit progress.

The new Chicken Roll, expanded salad range and matcha drinks are believed to be attracting younger shoppers and lifting frequency. Revenue is up 6.79% year-on-year.

That type of confidence is encouraging, but will it last – and is there more to the story?

Expansion continues despite energy risks

Greggs now has 2,759 operational stores, up 2.5% in the first 19 weeks of 2026. The most notable development is the baker’s first international outlet located in Tenerife South airport.

The estate growth and an airport presence should appeal to investors who want scale and new revenue streams. But expansion also needs working capital and efficient supply chains.

That real question now is, can Greggs make the new sites pay quickly?

Those sausage rolls won’t cook themselves

Greggs has warned that a prolonged Middle East conflict could push up energy and commodity costs. It said it “will likely see higher overall cost inflation through the end of 2026 and into 2027”.

It’s hedged much of its 2026 energy and fuel needs (about 85%) and around five months of food and packaging cover — but longer-term inflation would squeeze margins. 

If costs keep rising, even those hedges may not be enough. 

How are the numbers looking?

From an investment viewpoint, the company’s core figures still look good.

Those numbers point to a healthy franchise, despite somewhat thin margins. The 20.44% ROE certainly suggests solid profitability, while a 4.2% yield helps the income case. 

The balance sheet is sizable but not stretched, giving Greggs room to keep funding new stores. But profits remain vulnerable to cost inflation, so that’s one area to watch

The key question now is, if energy bills spike, how severe will the profit hit be?

My verdict

For me, this fresh burst of energy is promising after a year of underwhelming progress. I now see a brand that is adapting and expanding at the right time. New products seem to be bringing customers back and the Tenerife move signals ambition.

But while its financials back up the recovery, the geopolitical-driven risk is real. If energy and commodity pressures ease, the stock could make a stronger comeback. The question is whether that happens soon enough for the baker to keep baking – and not cut dividends.

For value investors with faith in the recovery, it’s worth considering at this inflection point. Personally, I’m going to keep holding my shares and see where this goes.