Greggs has decided not to increase prices for the rest of 2023 despite experiencing a slowdown in sales during the third quarter. The decision was confirmed by CEO Roisin Currie, who remains optimistic about the company’s future.
CEO Roisin Currie announced that there are ‘no plans to put up prices for this year,’ emphasising that costs are stabilising faster than anticipated. Earlier in the year, Greggs had to adjust prices due to inflation, driven largely by rising wages. Notably, the cost of Greggs’ signature sausage roll increased by 5p in July.
Looking ahead, Currie suggested that future price adjustments might be influenced by statutory minimum wage increases expected next year. However, for now, the company is committed to maintaining its current prices, providing some financial relief to its customers.
Despite the decision to hold prices steady, Greggs experienced a sales dip over the summer. This led to a 5.8% fall in its share price, bringing it down to £29.42. It’s important to note that despite this dip, the stock has gained over 20% in the past year.
Currie attributed the weaker sales in July and August to a combination of poor weather, economic uncertainty, and unrest in several cities that resulted in damage to a few stores. These factors collectively hampered sales during these months.
Sales saw a rebound in September as people returned to work.
The launch of Greggs’ autumn menu, which includes seasonal favourites like pumpkin spice lattes and a new pumpkin spice doughnut, has been well-received by customers.
This seasonal offer is expected to drive further growth for the company as it capitalises on the popularity of autumn-themed treats.
Greggs continues to expand its footprint, boasting over 2,500 outlets nationwide.
The bakery chain plans to open up to 160 net new shops this year, aiming to increase its presence in supermarkets, petrol stations, and travel hubs.
Additionally, Greggs has expanded its delivery partnerships with Uber Eats and Just Eat, making its products more accessible to a wider customer base.
Analysts remain optimistic about Greggs’ long-term growth prospects. Some are forecasting a 10% increase in pre-tax profits for the year, highlighting the company’s resilience and strategic growth initiatives.
This positive outlook is bolstered by the company’s continued expansion and ability to adapt to changing market conditions.
CEO Roisin Currie’s leadership continues to inspire confidence among stakeholders.
Her strategic decisions, including the stabilisation of prices and expansion efforts, are seen as pivotal to the company’s sustained growth and success.
In summary, Greggs’ decision to maintain current pricing for the rest of 2023 reflects a strategic move to balance customer affordability with business stability. Despite facing a sales dip over the summer, the company remains optimistic about future growth, supported by expanding outlets and popular seasonal offerings. With analysts forecasting increased profits and a robust expansion strategy, Greggs is well-positioned for continued success.
