Greggs raised prices for the second time this year, despite the bakery chain’s efforts to mitigate the impact of inflation on customers.
The retailer, which operates around 2,200 stores across the UK, reported total revenue of £694.5 million in the first half of the year, up 27.1 per cent on 2021 when Limitations of Covid-19 closed shop.
However, profit only increased by 0.5% over the same period, due to the chain’s adjustment of business rates, increase in value-added tax and higher costs.
Greggs said it has raised prices again even though it has “worked hard to minimize the impact of the cost increase on customers”.
Cost inflation “increased significantly” in the first half of the year “driven by food, packaging and energy commodities,” Greggs said. The company now predicts overall cost inflation to be around 9% in 2022.
However, the retailer said the small price hikes it has made so far do not appear to have affected sales.
Greggs said at the beginning of the year that prices would increase by 5p to 10p. It had previously predicted that the price would rise as much as 7% before posting its latest gains on Tuesday.
In an effort to limit further impact from inflation, the retailer fixed the cost of producing food, packaging and energy for the next five months.
Despite concerns about a consumer slowdown, Greggs said it is pushing ahead with plans to expand its UK property to 3,000 stores.
The retailer opened 70 stores in the first half of the year and plans to open 80 more by the end of the year, focusing on expanding its presence in retail parks, railway stations and central London. . The retailer added that it can maintain a net increase of 150 stores per year beyond 2022.
Roisin Currie, who took over as chief executive of Greggs from Roger, said: “We are well positioned to tackle the well-publicized challenges affecting the economy and continue to have many. Exciting growth opportunities ahead, with a clear expansion strategy. Whiteside in May of this year.
Greggs’ share price jumped 2.2 per cent to £21.24 in early London trading.
Currie added that Greggs’ “exceptional value” will help it succeed “in a market where consumer income is under pressure”.