Greggs boss Roger Whiteside has said it would be “irresponsible” to rule out further price rises on products and warned inflation could hit 6% or 7% this year as ingredients and energy prices skyrocket.
Whiteside said that Greggs wouldn’t increase prices across the board “until the market moves”, but said the food-to-go specialist had expected inflation to hit 5% this year. However, following Russia’s invasion of Ukraine, he said Greggs was now anticipating inflation hitting as much as 7% this year.
“There’s no specific product or ingredient where we expect price rises. They’re all going up, it’s across the board. We only ever move prices a few pence at a time each time we have to move prices, so we certainly wouldn’t jeopardise our position as price leader in the markets in which we compete.
“So, depending on how the market reacts, you might see that you might see that we want to protect prices at one end of the market where we can see competition is more intense. But when prices rise more aggressively in other parts of the market, those are the sort of judgments we need to make on a product by product basis.”
Signs of hope for the future
Whiteside said that Greggs was expecting profits to be flat for the coming financial year, particularly as the food-to-go specialist held onto the government’s business rates relief last year that won’t be offered this year.
“Flat profits [this year] will be a strong achievement given we won’t benefit from government support with lower taxes”.
However, despite the significant headwinds, Whiteside was optimistic for both the immediate and longer term future of the brand.
Greggs is aiming to extend opening hours across another 500 stores to move into later in the day, and he said that footfall had increased to Greggs stores across its estate.
“We’ve got the opportunity to reach much further into the market, because we can go multi-channel now which was always the plan in the past five years with the transformation we’ve been undertaking.
“We’re now going to reach into all the parts of all channels and hope to double sales for the brand. Eventually we’ll begin to look internationally to see how we can take the brand abroad. So I’ve been very optimistic about the business.”
Whiteside also insisted that despite profits dropping this year, the business wouldn’t slam the breaks on any of its investment or expansion plans.
“Over the years we’ve invested heavily in the business and it’s that investment which gives us a platform to be more efficient through things like automation,” he said. “If you can keep growing then you can offset the fixed costs against the growing sales base which again will help keep prices under control.”
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