High street bakery chain Greggs will raise prices on some of its most popular products this week, its chief executive has confirmed.
From Thursday, the cost of Greggs’ two-part and three-part breakfast meal deals will each rise by 20p, to £3.15 and £4.15 respectively. Prices for biscuits will also increase by around 5p per item.
The firm’s iconic sausage roll, already raised to £1.30 earlier this year, will remain unaffected in this latest round of price hikes.
National Insurance Hike Behind Cost Pressures
Chief executive Roisin Currie said the company was being forced to act due to higher staffing costs, including a surprise £20m increase in employer National Insurance contributions introduced in last year’s Budget.
“It’s quite hard to plan and manage a business when you have a £20m hit that you hadn’t predicted,” she said, warning that similar surprises in the upcoming Budget could lead to further challenges.
Greggs has already raised prices twice earlier this year, mirroring increases across the UK high street as retailers grapple with higher energy, wage and tax bills.
Wider Trend in High Street Price Rises
Greggs’ announcement follows similar moves by rivals. In August, Tesco increased its meal deal price by 25p, while coffee chain Costa has raised hot drink prices this year.
Despite the changes, analysts say Greggs remains competitive. Laura Lambie, senior investment director at Rathbones, said: “Greggs is still the cheapest by far of all the other major high street coffee and sandwich shops such as Costa or Pret. But their customers are a lot more price-conscious, so they cannot withstand major hikes.”
Expansion Plans Continue
Despite cost pressures, Currie said Greggs was pushing ahead with growth. The chain, which already operates more than 3,000 shops nationwide, plans to open a net 120 new sites in 2025.
Expansion will focus on retail parks, roadside services, and southern England, where Greggs sees “compelling opportunities” to grow its presence.
“Some were querying, ‘have we reached peak Greggs?’” Currie said. “We’ve gone out to demonstrate that this is not the case.”
Budget Concerns and Minimum Wage Impact
Currie said she expected price pressures to ease next year, but warned the upcoming Budget could affect that outlook. A rise in the minimum wage could also add to costs.
Last year’s Budget decision to raise employer National Insurance to generate £25bn for the Treasury drew sharp criticism from businesses, with Greggs now pointing to it as a key driver of its latest price hike.
Solid Sales Despite Summer Slowdown
Greggs reported that the July heatwave dented sales, as demand for hot pastries and bakes dipped. However, sales rebounded in August and September, with year-to-date revenues up 6.7% compared to last year.
Currie said she remained confident in the chain’s ability to weather short-term pressures: “Greggs is still incredibly resilient, and our value remains strong compared to the rest of the high street.”
