Greggs sausage roll and steak bake prices set to soar as costs rise, chain warns

Bakery chain Greggs has warned customers it may have to raise its prices again to keep up with rising costs.

The value bakery added between 5p and 10p to the price of products at the start of 2020 and brought in a further hike in May.

It said it had no choice but to make the move as ingredients had become more expensive amid soaring inflation.

Roisin Currie, Greggs chief executive, said soaring energy prices and “tough” market conditions meant the cost of pastries could increase again in the coming months.

“We know the economic environment is challenging and it is tough out there for our customers, so we are doing everything we can to protect our price proposition,” Ms Currie said.

“We are not immune to cost inflation but we are trying hard to mitigate against it impacting customers.”

Rising prices appear to have done little to dent customers’ appetite for Greggs.

The company saw sales leap 27.1 per cent in the 26 weeks to 2 July as customers turned to value meals amid the cost of living squeeze.

But profits remained largely flat.

Charlie Huggins, head of equities at the Wealth Club, said: “The cost of raw materials, energy and wages are all rising rapidly. Greggs is significantly exposed to all three, putting pressure on profits.

“There’s a limit to how far it can raise prices to offset these extra costs. If Greggs can maintain its recent sales momentum, it will go some way to offsetting inflationary pressures.

“But the group’s near-term prospects still look rather unappetising given the extremely unsavoury cost outlook.”

Greggs’ financial results coincide with the company announcing the appointment of Matthew Davies as its incoming chair. He will take over from Ian Durant on 1 November.