Greggs has elevated costs for the second time this yr, regardless of makes an attempt by the bakery chain to mitigate the affect of inflation on prospects.
The retailer, which runs about 2,200 outlets throughout the UK, reported £694.5mn in whole gross sales within the first half of the yr, up by 27.1 per cent in contrast with 2021 when Covid-19 restrictions shuttered shops.
However earnings elevated by simply 0.5 per cent over the identical interval, with the chain blaming the reintroduction of enterprise charges, a rise in worth added tax and better prices.
Greggs stated it had elevated costs once more regardless that it had “labored onerous to mitigate the affect of rising prices on prospects”.
Value inflation “elevated considerably” within the first half “pushed by meals, packaging and power commodities”, Greggs stated. The corporate now predicts general value inflation of about 9 per cent in 2022.
Nonetheless, the retailer stated the small value will increase it had made to date haven’t appeared to have affected gross sales.
Greggs stated at the beginning of the yr that it could add between 5p and 10p to costs. It had beforehand predicted that costs would rise by as much as 7 per cent earlier than asserting the most recent improve on Tuesday.
In an try and restrict additional affect from inflation, the retailer has fastened manufacturing prices for meals, packaging and power for the following 5 months.
Regardless of fears over a shopper downturn, Greggs stated it was pushing forward with plans to develop its UK property to as many as 3,000 outlets.
The retailer opened 70 shops within the first half of the yr and plans to open an additional 80 by the top of the yr, specializing in increasing its presence in retail parks, railway stations and central London. The retailer added that it might maintain a internet improve of 150 outlets a yr past 2022.
“We’re nicely positioned to navigate the extensively publicised challenges affecting the financial system and proceed to have various thrilling progress alternatives forward, with a transparent technique for enlargement,” stated Roisin Currie, who took over as Greggs’ chief government from business veteran Roger Whiteside in Might this yr.
Greggs’ share value was up 2.2 per cent to £21.24 in early morning buying and selling in London.
Currie added that Greggs’ “distinctive worth” would assist it succeed “in a market the place shopper incomes are underneath stress”.