Greggs warned that inflationary pressures would make his sausage rolls more expensive and cut profits this year, even as the bakery chain toasted record results.
Roger Whiteside, 63, a retired chief executive of the bakery chain, said it would be “irresponsible to provide a guarantee that prices will not rise further” as the industry faces “inflation across the board”. He added that as a result of the pressure, “we do not currently expect material gains in the coming years.”
Shares of Greggs initially fell 10 percent yesterday on caution, but fell just 77p, or 3.4 percent, to £ 22.06 as analysts predicted the company’s strength and growth prospects.
The Newcastle-upon-Tyne-based firm said before the Ukraine crisis that it expected inflation to be around 5 percent due to high labor, energy and material costs. But the impact of rising soft-commodity spending means inflation is now running at 6 to 7 percent.
Gregs said spending pressures at the beginning of the year were already “requiring some price increases”, “and further increases are expected.” The price of a Greggs sausage roll rose 5p to £ 1.05 last year, while other items rose 10p, sparking outrage from some customers.
Whiteside says Greggs will not jeopardize its position as a low-cost food retailer, so its price increase will depend on the competitive landscape.
Despite inflationary pressures, Greggs has confirmed plans to expand his shop estate from 2,181 to at least 3,000 stores by opening 150 stores a year. It recently opened sites in London’s Canary Wharf and Kings Cross, as well as a number of “drive-through” sites, as it focuses on city locations where rents fall during the epidemic.
The update comes as Greggs reports the biggest sales and profits in its 71-year history. Sales grew বছরে 1.23 billion a year from January, up 51 percent from last year when it was disrupted due to lockdowns and low manpower, and increased by 5.3 percent in 2019 compared to pre-epidemic levels.
Whiteside says “sales performance has been achieved despite unexpected supply shortages [becoming] Is a daily feature of our activities. “
Annual pre-tax profits rose to 145.6 million, compared to last year’s loss of £ 13.7 million, and still higher than the র 108.3 million recorded in 2019 before the coronavirus crisis. As a result of the profit recovery, Greggs is offering his employees a .6 16.6 million reward and a 40p-per-share special dividend for investors above the 42p-per-share final dividend.
Whiteside said, “In my long retail career, I have never experienced such a high level of prolonged disruption in operations, and we owe our success last year to our team’s commitment and willingness to work with these issues.”
The chief executive, who has overseen the seven-fold rise in Greggs’ share price over his nine-year term, will resign in May and hand it over to retail and property director, 50-year-old Roisin Curry. The company has identified international expansion as its next growth area.