Must read: Greggs defies short sellers while On the Beach plunges
ii’s head of investment rounds up the morning’s big news.
12th May 2026 09:05
by Victoria Scholar from interactive investor
Greggs
Greggs (LSE:GRG) delivered a positive trading update with like-for-like sales in the past 10 weeks up 3.3%, and up 2.5% in the first 19 weeks of the year. Greggs also kept its full-year outlook unchanged. The bakery chain is opening its first shop in an airport outside the UK in Tenerife South and said it is targeting around 120 net openings for the full year.
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The high street food chain has managed to deliver a better-than-expected performance so far this year thanks to strong demand for new products like its Chicken roll and its Matcha drink alongside continued demand for its classics like the sausage and vegan roll. It has also achieved positive results from its partnerships with grocery retailers such as its tie-up with Tesco to expand its ‘Bake at Home’ range.
Greggs has been a heavily shorted company in the UK, with hedge funds betting against the FTSE 250 baker amid concerns about its UK market saturation and the impact of weight-loss drugs on demand. However, Greggs has been quick to respond, expanding its offering by introducing healthier salad options to widen its lunchtime choices and broaden its appeal towards the more calorie conscious consumer.
Shares in Greggs are up over 3% today, but are still down by around 13% over a one-year period.
On The Beach
On The Beach Group (LSE:OTB) reintroduced guidance having suspended it in March following the outbreak of the Iran war and the uncertain outlook for international travel. However, its reinstated outlook was very disappointing, with full-year adjusted profit before tax expected to come in between £18 million and £25 million. Analysts had expected between £38.5 million and £42 million.
Shares have plunged by around 15% today, reflecting the profit slowdown amid weak demand for holiday destinations like Dubai and Egypt because of tensions in the Middle East. Consumers are also booking later, creating uncertainty for the online travel agent.
To its advantage, On the Beach is an asset light business model without fixed assets like traditional tour operators, shielding it to some extent from some of the inflationary headwinds.
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However, it is far from immune from the geopolitical disruptions and the weakening demand outlook. The company will be hoping for a flurry of late bookings and a strong summer trading performance to offset a challenging start to 2026.
Shares are down around 38% so far this year and 47% over a one-year period. Analysts were optimistic prior to the announcement, with a consensus buy recommendation on the stock.
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