High street bakery chain Greggs has revealed it has increased prices on some of its bakes and sandwich ranges as it faces pressure from a soaring staff wage bill.
The group’s chief executive, Roisin Currie, told the PA news agency that Greggs has increased the prices of some items on its menu by 5p and 10p in recent weeks, but has kept meal deal prices unchanged.
She insisted no more price rises are planned for the rest of the year.
Details of the price increases came as the group posted a 16.3% rise in underlying pre-tax profits to £74.1 million for the six months to June 29 as like-for-like company-managed shop sales jumped 7.4%.
The firm admitted the profit growth was also supported by “better recovery” of cost inflation than a year earlier.
Ms Currie said the group took action 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 said: “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.”
She added there are “no prices increases on the cards currently” for the remainder of the year.
The group saw total sales rise 13.8% to £960.6 million over the first half.
It said sales were helped higher by new menu options, with iced drinks such as its mango and strawberry cooler and the strawberries and cream refresher now available in 500 shops, and with plans to roll out to a further 200 shops this year.
Pizza deals also drove strong sales growth, according to the group, which recently launched a four-slice sharing box to add to the hot food range.
Greggs said it remains committed to its long-term aims to have “significantly” more than 3,000 shops across the UK, having opened 99 new shops and closed 18 to reach 2,524 in the first half.
It is planning to open up to 160 new shops on a net basis – those opened minus those closed – this year as a whole.
The firm is redeveloping and extending its warehouses in Birmingham and Amesbury in Wiltshire, which is set to complete in the second half of the year and will help support another 300 shops.
Ms 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.”
She added: “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.”
Overall it said cost inflation in the first half of 2024 stood at 4% and is expected at 4% to 5% for the year as a whole.
“Whilst uncertainties remain, the board’s expectations for the full-year outcome are unchanged,” Ms Currie said.
