Greggs has cautioned that rising employment costs will lead to price increases across its product range, citing “lower consumer confidence” towards the end of last year as a factor in declining sales.
This means that prices of Greggs products including sausage rolls, coffee and doughnuts have risen as the bakery chain passes some higher costs to customers.
The national price of its traditional sausage roll has risen by 5p to £1.30, although this will vary in locations across the country. Greggs’ chief executive Roisin Currie added that other products will also face rises by between 5 and 10p.
About two thirds of the chain’s staff benefited from about a 6% increase to their salaries at the start of 2025 and while this is good news for workers, it left the chain having to increase some of its prices.
“We have had to pass a minimum amount of price rises onto customers… but we work hard to protect as many prices as we can,” Ms Currie said.
While prices of individual products have gone up, the boss confirmed that some of its meal deals such as breakfast and lunchtime offers had not changed.
“We remain known for value but we are not complacent about that,” she stressed.
It is unclear whether there will be further price rises this year but the chief executive said the company was continuing to face some inflationary “headwinds”.
Furthermore, Greggs is among some of Britain’s biggest retailers to be facing a bigger tax bill this year because of a planned hike to the rate of employer national insurance.
As one of over 70 businesses that wrote to Chancellor Rachel Reeves last year, Greggs warned that changes announced in the October Budget made price hikes a “certainty”. In a statement on Thursday, the London-listed firm expressed confidence in its ability to mitigate cost inflation while maintaining its value leadership, as it has done in recent years.
Greggs reported a 2.5% growth in fourth-quarter sales, despite a “more challenging market backdrop” in the second half of the year. The quarterly result means Greggs achieved £2 billion in annual revenue for the first time in 2024, representing an 11.3% increase from 2023.
However, sales, including those of its popular sausage rolls and Festive Bakes during the Christmas period, fell short of the 5% growth seen in the previous quarter.
Ms Currie stated: “Our value-for-money offer and the quality of our freshly prepared food and drink position us well to meet the headwinds we expect to see in the year ahead and we remain confident in the significant long-term opportunity for growth.”