Healthy turnover but cost worries for Greggs

Sausage roll maker Greggs reported rising sales and profits last year after being boosted by its healthy eating ranges.

It warned over cost pressures this year because of the fall in value of sterling.

Greggs said like-for-like sales rose 4.2% in the year to December 31, with total sales growing 7% to £894.2 million.

Pre-tax profit nudged up from £73m to £75.1m.

The company, best known for sausage rolls, doughnuts and pasties, said sales of healthier food, such as salads and yoghurts, topped £100m and now make up 10% of all revenue.

In January the FTSE 250 company said its Balanced Choice menu continues to prove popular.

It will soon be extending its hot drinks range to include vanilla latte alongside Fairtrade peppermint tea and green tea.

Chief executive Roger Whiteside warned: “The UK consumer outlook is more challenging than we have seen in recent years.

“There are industry-wide pressures emerging in commodities as well as labour costs.”

The firm added, in the short term, it faces a period of “greater economic uncertainty and increased pressure from cost inflation”.

Sterling’s collapse since the EU referendum has seen import costs for British businesses rocket.

Mr Whiteside said Greggs is “confident of making further progress as we implement our plan to grow Greggs as a contemporary food-on-the-go brand”.

Greggs, with headquarters in Newcastle-upon-Tyne, is the largest bakery chain in the United Kingdom.

It has some 1,700 shops, about 20 in Tayside and Fife, and around 20,000 staff.

Last year more than 200 shops were refurbished, with 145 new shops opening around the country.

Greggs is facing pressures from rising costs.