Fast food retailer, and sausage roll purveyor Greggs, has confirmed prices are likely to rise later in the year due to an increase in running costs. The high street baker, which already raised some prices this year, is set to take a closer look at whether customers are prepared or even able to pay more for their products.
The change comes as Greggs business costs are set to increase by more than six per cent, despite commuter footfall still being below pre-Covid levels . However, the retailer said it will try to protect its reputation for being “outstanding value for money”.
In a bid to serve more customers the bakery have also announced they will be extending late night opening to 500 of their shops, while also offering delivery from an additional 300 stores. They currently deliver from 1,000.
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A spokesperson for Greggs said: "This has necessitated some price increases, which were made at the start of this year, and further changes are expected to be necessary.
“As ever, we will work to mitigate the impact of this on customers, protecting Greggs’ reputation for exceptional value in the freshly-prepared food-to-go market.
“Given this dynamic, we do not currently expect material profit progression in the year ahead.”
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However, boss Roger Whiteside said the company will have to assess whether it is able to change prices before it does.
It comes down to ensuring that customers will still choose to spend money at Greggs even if prices go up.
“We’ve got no plans to raise prices currently, but obviously that’s going to have to remain under review given the way the markets are moving around the world on commodity food prices in particular,” he said.
“If the market allows price increases to move onto customers, then we will have to attempt to do that, if it doesn’t then we won’t be able to,” he added.
“You’re trying to position price to make sure you maximise sales."
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The business swung back to a profit last year after taking a hit in 2020 when many of its shops were closed for much of the year due to the pandemic.
The chain notched up a £145.6 million profit before tax, from a loss of £13.7 million the year before.
Sales rose 5.3 per cent compared with 2019, the year before the pandemic, reaching £1.2 billion.
Ross Hindle, an analyst at Third Bridge, said: “Overall, the UK food-to-go market remains depressed, with commuter footfall stubbornly below pre-Covid levels.
“Despite difficult trading conditions, Greggs has been able to punch above its weight thanks to a recipe of competitive pricing, clever location strategy, and their JustEat delivery partnership.
“In 2021 Greggs drove revenue growth through store expansions, opening some 131 new shops.
“More shops may have meant more sausage roll sales, but a lack of like-for-like growth is now a concern.
“With the wow factor of its vegan offerings now a distant memory, Greggs needs to provide more innovative and broad meal and drink choices, our experts say.”
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