Andrea Felsted is a Bloomberg Gadfly columnist covering the consumer and retail industries. She previously worked at the Financial Times.

Keep calm and eat cake would be fitting advice for Brexit Britain. But eating pies would be more sensible.

Patisserie Holdings Plc, which operates the Patisserie Valerie upmarket bakery and café chain, and Greggs Plc, its more downmarket counterpart, have both reported strong sales, as Britons tucked into afternoon teas and steak bakes with equal gusto.

Though the shares in both got hit after the referendum vote, Patisserie Holdings has bounced back strongly since November, with its stock up 25 percent over the past three months as fears about the condition of the British consumer have eased slightly. In contrast, Greggs is up just 5.5 percent.

Not a Sausage
Upmarket Patisserie Valerie has bested Greggs as fears eased about the health of the U.K. consumer
Source: Bloomberg

Although Gadfly has argued that inflation in the shops might not be as severe as the slump in sterling would suggest, higher prices are on their way.

With spending power squeezed, consumers are likely to economize. Eating out of the home -- from coffees to casual dinners -- could be one of the areas that is hurt if Britons feel the pinch.

Although a cup of tea and one of Patisserie Valerie's fancy cakes is an affordable treat, a trip to one of its shops might also be one of the first items to be knocked off the shopping list in tougher times, even for the chain's well-heeled customers.

Greggs and its famed sausage rolls, on the other hand, have more staying power, given its menu of breakfast and lunchtime staples, and low prices. It has also added salads and other lower-calorie options, diversifying its previously pastry-heavy menu.

The sunnier outlook for Greggs isn't reflected in the ratings. Patisserie Holdings trades on a forward price to earnings ratio of almost 20 times, compared with Greggs' 16 times.

Cake By The Ocean
Patisserie Holdings' higher p/e ratio reflects its greater potential to roll out stores to new locations
Source: Bloomberg Intelligence

Its footprint is about a tenth of Greggs', so the higher valuation reflects the potential for rolling out new stores. But with the coffee and casual dining sector looking increasingly crowded, a model that relies on significant new store openings looks a lot riskier.

And while Greggs has a more mature portfolio, and must rely on wringing growth from its existing stores, so far, it is taking the cake -- or rather the salted caramel ring doughnut. Same-store sales in directly managed outlets rose by 6.4 percent in its fourth quarter, or 4.1 percent excluding Christmas and the New Year. 

For Patisserie Holdings, too much expansion might leave investors with a case of a moment on the lips, a lifetime on the hips.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Andrea Felsted in London at

To contact the editor responsible for this story:
Jennifer Ryan at