Food-to-go operator Greggs is to increase its prices from today as it looks to combat increased employment costs, as its chief executive Roisin Currie asked the government for “no surprises” in next month’s autumn Budget.
The brand’s two-part breakfast deal, which includes a roll and drink, will rise from £2.95 to £3.15 as part of the changes, while the price of the three-part breakfast deal, which includes a side such as yoghurt or hash browns, will also rise to £4.15, up from £3.95.
Some individual items will also be increasing in price such as the Star Biscuit, which will increase by 5p up to £1.40. However, the price of a sausage roll will stay the same.
Speaking after Greggs reported a 1.5% increase in like-for-like sales over its third quarter, Currie said the company tried to keep prices as low as possible but was navigating an inflationary environment and had not raised prices since May.
Currie said Greggs’ wage bill increased due to minimum wage rises and “surprise” higher employers’ national insurance contributions, which cost the business £20m.
The outlook for further cost pressures on the company was uncertain as Currie said Greggs was “still doing some work” on inflation projections and didn’t know about potential further national living wage rises.
She added: “Without those (upped staffing cost) factors, the outlook improves.” Looking ahead to the upcoming November Budget, Currie said she hoped for a “balanced Budget”.
She said: “I guess what’s not helpful is when it’s something that comes out that surprises us, and that’s what happened with the national insurance last year – we weren’t expecting that, and it came in very quickly.
It’s quite hard to plan and manage a business when you have a £20m hit that you hadn’t predicted or weren’t aware was coming.”
Currie said she was hoping for changes as part of the Budget that will put “money in the pocket of the consumer”, with businesses being given “reasonable notice” over any changes affecting businesses.
Currie added consumer confidence was still fragile, with many people saving their disposable income rather than spending, adding when consumers do spend, they are “spending wisely.”
She said: “With us being a great value proposition, hopefully that means some of those customers will be swapping into Greggs to take advantage of that great value.”
