Greggs raises prices in blow to customers - but pledges to open 160 new stores
Greggs is raising prices but opening new stores
PA
Greggs is set to raise its prices in a blow to customers, however, the company has pledged to open 160 new stores this year on a net basis in a win for Britain's high streets.
Roisin Currie, the group's chief executive has said the price of some items on its menu has gone up by 5p and 10p in recent weeks as it seeks to expand its number of stores.
It should be noted that Greggs has kept its meal deal prices unchanged. Currie added there are “no price increases on the cards currently” for the remainder of the year.
The chief executive noted said the company's decision on prices is based on having 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 explained: “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.”
Despite these recent price hikes, Greggs is not set to leave high streets any time soon. This comes amid a wave of store closures that have hurt the economy of many local communities.
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The bakery chain posted strong sales for the first six months of the year
PA/GREGGSThe bakery chain confirmed its long-term aim to have “significantly” more than 3,000 shops across the UK. It has already opened 99 new stores and closed 18 to have a 2,524-strong portfolio in the first half of this year.
The renewed commitment to the high street comes as Greggs posted high half-year sales and profits. Based on its half-year results, the group saw a 16.3 per cent rise in underlying pre-tax profits to £74.1million. For the six months to June 29, like-for-like company-managed shop sales rose by 7.4 per cent over the period.
The company cited the fact that sales were bolstered by new menu options introduced earlier in the year.
This included iced drinks, such as its mango and strawberry cooler and the strawberries and cream refresher, which is now available in 500 shops. The iced beverage offerings are set to be rolled out to a further 200 shops this year.
Furthermore, Greggs's pizza deals were also a contributing factor to strong sales growth in the first six months of 2024.
According to the group, its recently launched four-slice sharing box has proven to be popular.
Currently, Greggs is in the process of redeveloping and extending its warehouses in Birmingham and Amesbury in Wiltshire.
They are likely to be completed in the second half of the year and will help support another 300 shops.
The chief executive of Greggs shared her perspective on the company's economic outlook going forward.
Currie said: “Greggs has made good progress in the first half of the year, further broadening our range of on-the-go food and drink whilst making it more accessible to more customers.
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The retailer's iced drinks helped bolster sales
GREGGS“Our cost outlook for 2024 remains unchanged and we continue to trade in line with our plan.
“The board remains confident in the long-term growth strategy, and we are investing to support that growth.
“Whilst uncertainties remain, the board’s expectations for the full-year outcome are unchanged.”
According to the company, cost inflation for the first six months of the year stands at four per cent and is projected to be between this level and five per cent throughout 2024.