In a note, Mr McEachran said: “Management have given their first formal reaction to the proposed introduction of VAT on all hot takeaway food, along with an alternative proposal.
“This issue remains material to the investment case and should be monitored closely.
“Given the tough start to the year, we would expect some small downgrades to consensus expectations and for the shares to weaken slightly.”
The company can trace its roots back to the 1930s, when John Gregg started delivering eggs and yeast on his pushbike to families in Newcastle.
Later, Greggs began to grow by acquiring regional bakery retailers across the UK and by the 1970s there were shops in Scotland, Yorkshire and the North West. In the 1980s, Greggs made its debut on the stock exchange.