Following today’s news that Greggs’ sales are up 27% in the first 19 weeks of 2022, but warns of cost pressures increasing for the rest of the year;

Hannah Cleland, Consumer Analyst at GlobalData, a leading data and analytics company, offers her view:

“Recent inflation has put value-for-money brand, Greggs, in a tricky position in terms of managing its pricing and margins. Other big-name foodservice brands such as McDonalds can empathize, as it announced its own price hikes in the first quarter of 2022. Although these issues are only just starting to take their toll on the fast-food industry, a healthy menu drive could be one solution but creative marketing will be pivotal.

“Although health remains a key influencer for 52%* of the UK population when choosing what to buy, it must also be weighed against rising prices. GlobalData’s research tells us that 53%* of Brits are extremely or quite concerned about their personal financial situation – a startling rise from 38%** in the previous quarter, showing that inflation is alarming consumers and ultimately making them more price-conscious in their purchases.

“Greggs’ on-the-go budget positioning will suffer, as price hikes see people plan and cook meals more regularly at home. Shrinkflation is also receiving significant negative press as many feel ripped off by smaller portions.

“However, given recent regulations surrounding HFSS (High Fat, Salt & Sugar), this might be an opportunity to change the narrative. Smaller portion sizes when marketed effectively can be positioned as ‘better-for-you’ because they immediately cut the calories. With a creative spin, Greggs may be able to cash in on demand for convenient, yet healthy breakfast and lunch options.”

*  GlobalData’s Q1 global consumer survey 2022, over 20,000 respondents surveyed across 42 countries every quarter

** GlobalData’s Q4 consumer survey 2021, over 20,000 respondents surveyed across 42 countries every quarter