Greggs CEO Roisin Currie has ruled out any imminent plans to drop prices, with the high street bakery chain seeing no sign of inflation slowing down.
Retailers have been under pressure to curb surging prices, as the latest figures from the BRC saw food inflation accelerate to 15.7% in April. Over the past few weeks, a number of supermarkets have announced cuts to the price of staples like bread and milk, after seeing a drop in supplier costs.
”I don’t currently see deflation in the market,” Currie said, ruling out the prospect of Greggs announcing cuts of its own.
”Inflation is one of the key issues that we’re all dealing with given the national living wage rises, as well as energy inflation and commodity inflation,” Currie said. ”But we continue to work hard to try and mitigate wherever possible. So that that’s constantly under review,” she added.
However Currie ruled out the prospect of further price increases either, adding that Greggs’ value ratings were currently “the highest ever”, which had in part helped it take some customers from higher-priced rivals.
Forward cover
Greggs had managed to secure forward cover on energy prices until Q3 this year, while it had also secured cover on food and packaging prices for the “next four to five months” Currie said.
“The quest for us is to make sure that we hold our prices and that we continue to offer that value proposition for customers,” Currie said, adding that the business would continue to look out for further cost efficiencies.
Currie was speaking to the press following the publication of the baker’s first quarter trading results.
Like-for-like sales across its company-owned outlets grew 17.1% to £609m in the first 19 weeks of 2023. While this partly reflected the impact of Omicron on trading during the first nine weeks of 2022, Currie maintained there was “absolute volume growth in those numbers” highlighting that Greggs’ market share had grown from 6.9% to 7.7% during the 2022 financial year.
Store openings
The retailer remained on track with its store opening plan, having added 63 this year so far, while closing 26 during the same time.
Over the next few months, the baker will expand its made-to-order sandwich service, to around 40 stores in the north east, Currie said. The click & collect service enables customers to order customised sandwiches and pizzas through Greggs’ app, to be collected in store.
While the baker still has a major focus on high streets, it sees a growing opportunity in travel hubs and roadside locations – which includes opening a new site at Gatwick Airport this summer.
“[It’s about] trying to make it as convenient as possible for customers to access Greggs wherever and whenever they want to,” said Currie. “There are a number of opportunities for us, which is why we still have belief in our shop opening pipeline for the future.”
Greggs is also set to expand its partnership with ABF-owned retailer Primark by opening two Tasty By Greggs outlets in Primark stores in Liverpool and Leeds. It will take the total number to six, adding to outlets already open in Bristol, Birmingham, Newcastle and London’s Oxford Street.
“We will pause at that point and take stock and then understand whether or not we think there’s any other Primark stores that would be right for Tasty By Greggs,” Currie said.
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