Greggs reveals price hike on favourite bakes and sandwiches amid soaring living wage bill

Bakery and snacks chain Greggs has hiked prices on some of its popular bakes and sandwich ranges as it faces pressure from a soaring staff wage bill.

Chief executive Roisin Currie said the firm has increased the prices of some items on its menu by 5p and 10p in recent weeks, but has kept meal deal prices unchanged. She insisted no more price rises are planned for the rest of the year.

Details of the price increases came as the group, which has more than 2,500 outlets, posted a 16.3 per cent rise in underlying pre-tax profits to £74.1 million for the six months to June 29 as like-for-like company-managed shop sales jumped 7.4 per cent. Total sales rose 13.8 per cent to £960.6m over the first half.

Greggs remains committed to its long-term aims to have 'significantly' more than 3,000 shops across the UK.

It said sales were boosted by new menu options, with iced drinks such as its mango and strawberry cooler and the strawberries and cream refresher now available in 500 shops, and with plans to roll out to a further 200 shops this year. Pizza deals also helped fuel sales, according to the group, which recently launched a four-slice sharing box to add to the hot food range.

Currie said the group took action to offset higher pay for its 32,000-strong workforce, having raised salaries earlier this year ahead of the increase in the National Living Wage.

She said: “The biggest inflation cost right now is the increase in the National Living Wage and making sure our employees get the wage increases that are appropriate. That puts pressure on the cost increases within the business.”

Overall, the group said cost inflation in the first half of 2024 stood at 4 per cent and is expected at 4 per cent to 5 per cent for the year as a whole. Greggs added that it remains committed to its long-term aims to have “significantly” more than 3,000 shops across the UK, having opened 99 new shops and closed 18 to reach 2,524 in the first half. It is planning to open up to 160 shops on a net basis - those opened minus those closed - this year as a whole.

John Moore, senior investment manager at wealth firm RBC Brewin Dolphin, said: “Greggs is a story of consistency - with strong sales growth, good levels of cash generation and a robust balance sheet. The bakery group had to contend with the challenge of high inflation in the post-Covid world, but has come through that period in an even stronger position. Its flexible and innovative approach has differentiated Greggs from the wider food category.”

Russ Mould, investment director at AJ Bell, added: “While it may feel as if there is a Greggs store on every high street, the company continues to find new places to plant flags. This includes concessions inside supermarkets and hubs inside train stations, while also taking advantage of troubles in the retail sector to relocate stores when better-sized or better-positioned properties come on the market.”

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