The threat of soaring inflation and its effects on consumer spending have weighed on Greggs shares all year, but the chain reassured the market this week that price hikes were not putting customers off their sausage rolls.

In the debut results for new CEO Roisin Currie, the food-to-go chain reported a 27.1% jump in first half sales to £694.5m, while like-for-like growth stood at 22.4%.

Greggs said trading in the second quarter “remained encouraging” as it passed the anniversary of restrictions being lifted in 2021, though first quarter like-for-like growth of 36.9% moderated to 11.2% in the second quarter.

First half like-for-like sales in company-managed shops were 12.3% higher than the equivalent pre-pandemic period of 2019, reflecting its shift away from the high street and into travel and convenience locations. However, footfall remained below 2019 levels.

Shop openings continued at pace. Seventy new shops opened – including 26 franchised units – while 12 closed, giving it a total of 2,239 outlets at the end of the period.

Progress on the bottom line was significantly slower, with pre-tax profits standing at £55.8m in the first half. That was largely unchanged from £55.5m in the prior year, as 2020 benefited from business rates and VAT relief.

The chain raised prices in May and stressed that after those rises, like-for-like sales in the four weeks to 30 July were up 13.1% – a higher rate of growth than the overall second quarter.

Greggs suggested overall cost inflation in 2022 would be around 9% and further cost increases would be likely, but maintained its profits guidance for the year.

Jefferies said the results suggested Greggs was “successfully managing inflationary pressures”, , adding: “That Greggs is successfully working through such a challenging period without downgrades is a testament to the resilience of the category, good management, and the quality of the business model.”

However, Hargreaves Lansdown explained the current conundrum for Greggs investors, which have seen shares drop 35% so far in 2022.

“Its position at the lower end of the value spectrum means Greggs is well placed to capture demand from those looking for a bite to eat, while times are tough. However, there comes a point when cash-strapped consumers rein in that sort of spending altogether, which would be problematic for Greggs.”

Greggs shares were up 2.6% on the news on Thursday and had risen a further 1.9% by Thursday to hit their highest level since early June. The shares have rebounded 18% over the past month on improved investors’ sentiment over its ability to absorb inflation and continue to grow.

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