Getty ImagesHigh street baker Greggs is set to raise prices on its breakfast meal deals and biscuits in response to growing cost pressures, the company’s chief executive has said.
Roisin Currie said the price increases would kick in from Thursday.
She said the action was being taken in response to increased staffing costs, including the impact of an unexpected £20m increase in the amount it pays in employer National Insurance as a result of last year’s Budget.
It will be the third time this year that the sausage roll maker has raised prices, mirroring a wider trend on the UK high street.
Both the two-part and three-part breakfast deal will increase by 20p each to £3.15 and £4.15p, respectively.
The Greggs’ boss said other price rises across other lines, like its biscuits would only be about 5p.
Greggs’ famous sausage roll will be unaffected in this round of price hikes, having already increased to £1.30 earlier this year.
In August, Tesco increased its meal deal price by 25p, while coffee chain Costa has also increased hot drink prices this year.
Despite cost pressures, the bakery chain will continue to open stores, and Ms Currie said there were opportunities to build more Greggs outlets in retail parks, roadside services as well as “compelling opportunities” to push further into southern England.
“Some were querying ‘have we reached peak Greggs?’ and we have gone out…to demonstrate that this is not the case,” the food retail boss said.
Greggs has more than 3,000 shops across the UK. It plans to open a net 120 sites in 2025.
Bracing for the Budget
The bakery boss said she expected price pressures on the business to ease next year, but that the upcoming Budget could change that assumption.
“What’s not helpful is when something comes out that surprises us – that’s what happened with the National Insurance last year…it’s quite hard to plan and manage a business when you have a £20m hit that you hadn’t predicted,” Ms Currie said.
Last year’s Budget included an increase in employer National Insurance aimed at raising £25bn for the government, which faced criticism from businesses.
Ms Currie pointed to potential increases to the minimum wage as another reason why cost pressures and price rises may continue.
Sales in July were affected by the summer heatwave, the pastry and pizza slice seller told investors in an update.
Shoppers returned for their steak bake and sausage roll fixes in August and September though, with overall sales for the year-to-date up 6.7% compared to last year.