Prices at Greggs could go up for the second time this year as business costs continue to rise

Greggs has said it will do its best to protect its reputation for "outstanding value for money". Credit: PA

The price of pasties and sausage rolls could be hiked for the second time this year as Greggs says it faces continued increasing costs.

The bakery chain has warned the cost of its products are likely go up having already upped some of its prices at the start of the year.

Higher staffing and ingredient costs look set to push the cost of doing business up by between 6% and 7%.

The firm said it will do its best to protect its reputation for "outstanding value for money", adding: "This has necessitated some price increases, which were made at the start of this year, and further changes are expected to be necessary.

"As ever, we will work to mitigate the impact of this on customers, protecting Greggs' reputation for exceptional value in the freshly-prepared food-to-go market.

"Given this dynamic, we do not currently expect material profit progression in the year ahead."

Bakery chain Greggs hopes extending the opening times at 500 stores will help boost sales Credit: PA

However, boss Roger Whiteside said the company will have to assess whether it is able to change prices before it does.

It comes down to ensuring that customers will still choose to spend money at Greggs even if prices go up.

"We've got no plans to raise prices currently, but obviously that's going to have to remain under review given the way the markets are moving around the world on commodity food prices in particular," Mr Whiteside added.

"If the market allows price increases to move onto customers, then we will have to attempt to do that, if it doesn't then we won't be able to.

"You're trying to position price to make sure you maximise sales."

Greggs in numbers

Mr Whiteside said the business needs to establish a reputation of being open late before it can realise the full benefits of keeping its doors open until 8pm, rather than the usual 6pm.

Ross Hindle, an analyst at Third Bridge, said: "Overall, the UK food-to-go market remains depressed, with commuter footfall stubbornly below pre-Covid levels.

"Despite difficult trading conditions, Greggs has been able to punch above its weight thanks to a recipe of competitive pricing, clever location strategy, and their JustEat delivery partnership.

"In 2021 Greggs drove revenue growth through store expansions, opening some 131 new shops.

"More shops may have meant more sausage roll sales, but a lack of like-for-like growth is now a concern."

'Staff bonus'

Staff will also be able to expect a bonus as Greggs shares 10% of its profits with employees.

For staff who have been with the business for over six years and work 20 hours a week, the bonus will work out at around £800, Mr Whiteside said.

He added that the business has no direct exposure to the war in Ukraine but that it will be impacted by global price rises which are expected from the Russian invasion.

Russia and Ukraine supply around a third of the world's wheat exports, and Ukraine is also a major supplier of sunflower oil.