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. The bakery chain stated that “employment costs will result in further overall cost inflation, although wage increases should provide support to consumers”.
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. Chief executive Roisin Currie attributed this to lower consumer confidence, which “continues to impact high-street footfall and expenditure”.
However, she 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.”