Greggs, the bakery chain, anticipates price increases across its product range due to rising labor costs. This follows a trend of similar warnings from other high-street retailers, including Next, which predicts a 1% price increase in 2025. The company's announcement sent its share price down significantly.
The rising cost of employment is cited as the primary driver for the anticipated price hikes. While wage increases could offer some consumer support, Greggs acknowledges the inflationary pressure. This situation echoes the concerns of other businesses, which petitioned the Chancellor of the Exchequer earlier this year.
Greggs reported record-breaking revenue of £2 billion in 2024, a 11.3% increase compared to 2023. Despite this positive financial performance, fourth-quarter sales growth lagged behind the previous quarter, a consequence of a weakening market.
Lower consumer confidence is contributing to the decline in sales figures. This is evident in decreased foot traffic and spending on the high street. However, Greggs' CEO remains optimistic, emphasizing the company's value proposition and the quality of its products.
The bakery chain expresses confidence in its ability to manage inflationary pressures while maintaining its value-driven position. Despite the challenges, Greggs anticipates long-term growth opportunities. The stock market reaction, with shares falling by up to 9%, underscores the concerns surrounding the cost increases and consumer sentiment.
