Cost pressures may lead to further price rises at Greggs

Greggs has seen improved performance over the past year, but warned of price rises ahead as future costs remain “uncertain”.

In its preliminary results for 2021 the bakery chain reported pre-tax profit of £145.6m, compared to a £13.7m loss in 2020 when many of its shops were closed for much of the year due to the pandemic. In 2019 the business made a profit of £108.3m.

While total sales were 5.3% higher on 2019 at £1.2bn, like-for-like sales (which exclude revenue from new shops) were down 3.3% from pre-Covid levels.

With food, energy and staffing costs on the increase, the company’s costs are anticipated to rise by 6-7% in the coming year.

Greggs has already increased some prices this year, but expects “further changes” to be necessary.

Chief executive Roger Whiteside, quoted by BBC News, said that while the company had no plans for immediate price rises, “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”.

The company “will work to mitigate the impact of this on customers,” Whiteside said, but “given this dynamic we do not currently expect material profit progression in the year ahead”.

Greggs returns to profit and plans to create 500 jobs

Greggs has reported stronger than expected sales and says it plans to create 500 new retail jobs in the second half of the year.

The high street bakery chain made a pre-tax profit of £55.5m for the 26 weeks to 3 July, compared with a £65.2m loss a year earlier when trading was hit hard by Covid-19 restrictions.

It was also up on the 2019 first-half figure of £40.7m.

Sales for the half-year were in line with 2019 at £546.2m, compared with £300.6m in the first half of 2020.

Chief executive Roger Whiteside said that sales had been stronger than anticipated in recent months and exceeded pre-pandemic levels in the four weeks to 31 July. As a result, the company now expects full-year profit to be “slightly ahead” of previous forecasts.

Greggs had 2,115 shops at the start of July and plans 100 net openings this year, with ambitions to expand to at least 3,000 stores.