This FTSE 250 stock has risen 40% over the past 6 months. Should I buy in now?

Greggs (LSE: GRG), the popular high-street baker, delivered strong results in January and is set for further expansion this year. After a tumultuous 12 months, can these FTSE 250 stocks get back on track?

Greggs sees sales rise significantly in the final quarter of 2022 to 18.2%, with festive specials such as mince pies and famous caramel lattes. Sales seem to have picked up on the previous year and the chain is set for expansion, with ambitions to open another 150 stores by 2023.

However, Greggs has faced some significant challenges over the past year. After the pandemic, problems remain with supply shortages, rising energy prices, and management changes. And this may continue in the near future.

Focus on value

Chief executive Roisin Currie, who takes the helm in May 2022, acknowledged cost inflation at 9% as the driver behind price increases on favorites such as sausage rolls. Currie cited value for money as key for customers during the cost-of-living crisis. In the first update of 2023 growth is strong due to several factors, including longer trading hours, availability of more digital channels and other options.

It seems there is a lot of potential for Greggs even as the cost of living crisis continues. As a cheaper alternative to high street regulars, such as Costa or Pret, Greggs can take on customers who want to save money. The newly introduced ‘double up offer’ encourages customers to trade up and buy two items.

Greggs is also able to steal away from its competitors with its range. Who can forget the impact of vegan sausage rolls on profits when they fly off the shelves in 2019? Vegan Sausage, Bean & cheeZe Melt, which was launched back in February, is a strong contender to make sales as well.

High-street stalwart

With the introduction of 11 new lines and a strong plant-based offering, Greggs certainly appeals to a wide customer base. Add in the ability to order through the app to get rewards, or even have takeaway delivered through Just Eat partnership, Greggs can be seen as a cheap easy treat.

Interestingly, the under-reported development could create fundamental changes to Greggs’ bottom line. Judge rejects Zurich’s limit on Covid-19 disruption for business losses with a limit of £2.5m. The judgment stated that there were multiple nuisance damages, each with a limit of £2.5m. As a result of the decision, Greggs may face a significant payout.

Despite the recent rise in share price, I still think Greggs has a lot of potential for growth and is one of the high street chains that will do well in the current economic environment. While I am not investing at the moment, I am strongly considering adding this stock to my retail portfolio.