In a move to offset the impact of soaring costs, Greggs, the UK’s largest bakery chain, has increased the prices of some of its most popular items. The company has added 5p to the cost of a sausage roll, bringing it up to £1.35, and 10p to the price of a latte, now priced at £2.25.
Roisin Currie, the Chief Executive of Greggs, stated that the company is “monitoring the market” to see how inflation evolves as it negotiates a pay rise for its workers this year. Currie acknowledged that it has been a “very tough, challenging market” for the company, with subdued consumer confidence and extreme weather conditions earlier in the year impacting the food-to-go market.
Despite the price increases, Currie said Greggs has no plans for further price hikes at present. The company is also expecting a slight reduction in business rates as a result of changes to the property tax in the upcoming budget, and is “doing a lot to try and remove costs” and battle inflation.
The news of the price rises has had an impact on Greggs’ share price, with the company’s stock sliding by more than 8% on Thursday morning. The company reported that sales at its established company-managed stores rose just 2.9% in the three months to 27 December, with growth led by the price increases.
While the total annual sales for Greggs rose 6.8% to £2.15bn, the company said it expects profits for the year ahead not to increase as it plans to open 120 new stores – fewer than hoped under its plans for continued expansion.
Currie expressed cautious optimism, stating that inflation is easing and is expected to be lower than it has been in recent years, which she believes will provide “a bit of respite to the consumer that’s probably got a bit fatigued [with inflation] over the past few years.”
