Greggs confirms price rises on popular deals following weak summer sales

Greggs, Britain’s biggest bakery chain, has confirmed it will raise the price of several of its popular value deals after reporting a weaker-than-expected trading performance over the summer. The move — which affects breakfast bundles and other well-known menu offers — comes amid what the company described as challenging market conditions, rising employment costs and an unusually warm July that dented demand for hot food. Investors were reassured that the action is intended to protect margins rather than signal a dramatic shift in strategy, but the decision has reignited debate about the balance between value and cost recovery in Britain’s high-street food market. (The Guardian)

What’s changing — and why

From the start of October, Greggs will increase the price of its two- and three-part breakfast deals — the three-part breakfast will rise from £3.95 to £4.15 and the two-part deal will move from £2.95 to £3.15 — along with a small number of other core menu items. Management says the rises are targeted and modest, designed to offset rising operating costs (notably wage inflation and higher employer tax contributions), while keeping Greggs positioned as an affordable, high-frequency option for customers. (The Guardian)

Greggs made the announcement as it published a trading update for the third quarter to the end of September. Like-for-like sales in company-managed shops grew by 1.5% in Q3 — a slowdown from the 2.6% like-for-like growth reported in the first half of the year — and the group blamed an unseasonably hot July for weakening demand for hot pastries and other warm food items. Trading picked up in August and September, but the summer lull was enough to prompt the price and cost moves. (Reuters)

Numbers that matter

Like-for-like sales growth (company-managed shops): 1.5% in Q3, down from 2.6% in H1. (Reuters)
Greggs operates 2,675 outlets across the UK and has opened 57 net new stores so far this year; it has revised its net new shop opening guidance for 2025 down to about 120 from an earlier 140–150 range. (Reuters)
Following the update and management commentary, Greggs’ shares jumped roughly 7% in early trading, reflecting investor relief that guidance was largely intact even as growth slowed. (The Guardian)

Those figures frame the company’s choices: modest price increases to preserve margins; continued but cautious expansion in store numbers; and an expectation that cost inflation will be slightly easier to manage in 2025 than in the current year. (Reuters)

Management’s pitch: protecting value, not abandoning it

Roisin Currie, Greggs’ chief executive, and other senior executives have been at pains to position the price increases as a defensive, targeted response to real cost pressures rather than a broad pivot away from the brand’s value proposition. Management emphasised that the tweaks are small, that most core products remain competitively priced, and that the chain continues to deliver “exceptional value” for customers — language intended to reassure price-sensitive shoppers and keep footfall stable. Analysts who follow the group note that measured, well-communicated price rises are a conventional tool for high-frequency food retailers to protect margins without drastic damage to volumes. (The Independent)

That message is particularly important for Greggs because its customer base is driven largely by convenience and price: millions of daily transactions across high streets, petrol forecourts and transport hubs are the lifeblood of the business. A large and sudden jump in pricing would risk a material hit to volumes; modest, well-targeted increases are intended to strike a balance. (The Guardian)

The weather, wages and tax: short- and medium-term pressures

Greggs’ explanation for the slowdown in summer sales was straightforward: unusually warm weather in July reduced demand for hot pastries, sausage rolls and breakfasts. That left a softer monthly performance that pulled down quarterly growth despite a rebound later in the summer. Weather-related volatility is a known seasonal risk for retailers selling hot food, but successive warm months can nevertheless trim revenue at scale for a company with Greggs’ footprint. (Reuters)

Alongside the weather, Greggs pointed to labour cost inflation and unexpected regulatory headwinds — including higher employer national insurance contributions this year — which have increased payroll bills and compressed margins. The company’s statement to investors framed the price rises as necessary to offset these structural input cost pressures, not as a response to a structural drop in demand for Greggs’ products. The Times and other outlets emphasised the employer NI point as a concrete factor pushing management to act. (The Times)

How the market reacted

The market response to the announcement was positive in the immediate term, with shares rising approximately 7%. That reaction reflects investors’ relief that Greggs had not slashed guidance or issued a profit warning; instead, it presented a plan to burnish margins while continuing to invest in store growth and cost control. However, the share price remains well below levels from earlier in the year and is down substantially over the last 12 months, as investors weigh slowing like-for-like growth and the potential for UK high-street saturation. (The Guardian)

Analysts’ views are mixed. Some argue the chain still has room to expand and that modest price rises are a sensible way to navigate temporary headwinds. Others warn that Greggs may be approaching saturation on the UK high street and that persistent margin pressure could force harder choices if consumer confidence weakens further. Those tensions — growth versus margin, price versus traffic — are now at the centre of how investors and commentators will judge Greggs’ next moves. (The Motley Fool)

Competitors, context and the consumer squeeze

Greggs’ price rises should be read in the wider context of the UK food and retail market. Grocery chains, coffee specialists and other quick-service operators are balancing cost pressures with the need to remain attractive to cash-conscious customers. Many of these businesses have been increasing prices selectively in response to wage inflation, energy costs and broader supply-chain pressures — but competition is fierce and consumers can be unforgiving if value is perceived to have been eroded. (The Guardian)

Consumer confidence remains fragile, influenced by broader macroeconomic concerns such as inflation, interest rates, and political uncertainty around government budgets and taxes. In that environment, a value brand like Greggs has to be especially careful: if customers trade down to even cheaper alternatives, the volume effect could undermine the benefit of price increases. Conversely, if Greggs’ convenience and perceived value remain strong, a small price rise might be easily absorbed. (inkl)

What customers can expect

For regular customers, the immediate impact is straightforward: the breakfast deals cost a few pence more. For high-frequency buyers the cumulative effect of incremental price rises across several categories could be noticeable over time, but management has emphasised that most core items remain good value and that the brand will continue to market promotions and meal deals to maintain appeal. The company also highlighted ongoing investment in new store formats and locations as part of its long-term growth thesis. (The Guardian)

Strategic implications for Greggs

Margin management: The price rises are a defensive margin tool — necessary if payroll and tax costs keep rising. If Greggs can hold volume relatively steady, the net benefit to margins may be material. (The Times)
Careful expansion: The decision to lower its net new shop opening target for 2025 (from 140–150 to about 120) shows Greggs is prioritising disciplined roll-out over aggressive expansion in the near term. That gives management flexibility to open in higher-return locations while conserving capital. (Reuters)
Brand positioning: Greggs must guard its value credentials. The company’s long track record of promotional activity and approachable price points is central to why customers visit; damaging that perception risks longer-term traffic declines. (The Independent)
Investor expectations: Short-term investor sentiment has stabilised, but longer-term confidence will depend on whether Greggs can deliver consistent like-for-like growth as it balances price, product and expansion. Analysts will be watching margin trends closely. (The Guardian)

Wider takeaways for the sector

Greggs’ price increase illustrates a pattern playing out across the UK retail landscape: businesses are slowly nudging prices upward to offset structural cost increases while attempting to preserve customer demand. The tightrope here is the elasticity of demand — if shoppers are willing to absorb small increases, retailers can protect margins without materially losing customers. If not, the market will force deeper trade-offs between price, volume and growth. (Reuters)

For policymakers, these dynamics underscore how measures that affect employer costs (such as national insurance changes) ripple through the real economy and ultimately influence consumer prices and business strategy. For consumers, the story is simple but real: some of the daily deals and bargains they rely on will tick upward as companies navigate a still-disrupted cost base. (The Times)

What could go wrong — and what could go right

Risks: If the economy softens further or unemployment rises, even modest price increases could reduce discretionary spending. A prolonged period of weak like-for-like growth would force Greggs to make harder choices — deeper price cuts elsewhere, slower expansion, or tougher cost restructuring. There is also the danger of a reputational hit if customers feel the value proposition has been eroded. (Reuters)

Upside: If costs moderate in 2025 (as Greggs suggested they might) and the chain maintains its convenience and product appeal, the price rises could shore up margins and leave the company well-placed to invest in new formats and more profitable stores. In that scenario, the modest early share price pop could prove prescient rather than merely reflexive. (Reuters)

Bottom line

Greggs’ decision to raise prices on its breakfast deals and a handful of other items is a deliberate, narrowly targeted response to real cost pressures and a weak July that slowed summer sales. The hikes are modest, but they sit at the intersection of two powerful trends: cost inflation that is still alive in the system, and a high-street consumer base that remains cautious about spending. For customers, the immediate change is small; for investors and competitors, the move is a signal that even beloved value brands will act to protect margins when the economic and regulatory environment tightens. How well Greggs balances price, traffic and expansion over the next few quarters will determine whether the strategy succeeds — or whether it exposes the limits of growth for one of Britain’s most familiar high-street names. (The Guardian)

Case Study 1: The Daily Commuter

Profile: Mark, 34, a construction worker from Manchester, stops at Greggs nearly every morning on his way to work.

Old habit: He typically bought the three-part breakfast deal (a bacon roll, coffee, and orange juice) at £3.95.
New price: £4.15 from October.
Reaction: “Twenty pence doesn’t sound like much, but if you’re buying it five days a week, that’s an extra £4 a month. Over a year, that’s nearly £50. For people like me who rely on Greggs for a cheap start to the day, it adds up.”

Commentary: For daily commuters like Mark, small increases compound over time, potentially prompting trade-offs such as switching to the two-part deal or reducing frequency. This highlights the “high-frequency risk” for Greggs: even minor changes can push customers to rethink habits.

Case Study 2: The Busy Parent

Profile: Sarah, 41, a single parent in Birmingham, often picks up lunch for herself and her children on weekends.

Example purchase: A sausage roll four-pack (£4.10), plus two cold drinks.
Impact of price rises: While sausage rolls themselves are unaffected, meal bundles cost slightly more.
Sarah’s view: “I still think Greggs is cheaper than Costa or Pret, but when kids ask for it regularly, the little increases start to bite. You notice when your weekly ‘treat’ costs more, especially with everything else going up.”

Commentary: Sarah’s experience shows how small price hikes affect families managing tight budgets. Greggs remains affordable compared to rivals, but price sensitivity among parents with children is a key risk.

Case Study 3: The Investor Perspective

Profile: Alan, 57, a small retail investor in Newcastle (Greggs’ home city).

Observation: Alan had seen Greggs’ shares fall nearly 20% over the past year but rise 7% after the price rise announcement.
Viewpoint: “The stock bump tells me investors are relieved Greggs is protecting margins. For long-term holders like me, I’d rather see modest price rises than profit warnings.”

Commentary: While customers grumble about rising costs, investors often view price increases as signs of financial discipline. Greggs’ challenge is balancing investor confidence with consumer trust.

Case Study 4: The Competitor Response

Profile: A mid-sized café chain operating in northern England.

Competitive risk: With Greggs lifting some bundle prices, rivals may see an opening to market cheaper breakfast offers or push loyalty schemes.
Example: One regional chain launched a £2.99 breakfast and coffee deal in September, explicitly branding it as “better value than Greggs.”
Implication: Price wars are possible at the margins, especially where consumers are highly price-sensitive.

Commentary: Greggs still dominates the value segment, but competitors will seize opportunities to lure budget-conscious customers if its “cheap and cheerful” image weakens.

Case Study 5: Seasonal Volatility

Profile: Greggs itself as a business.

Problem: An unusually hot July saw demand for hot food fall sharply.
Example: Sales of sausage rolls and steak bakes dipped, while cold drinks and salads sold more strongly.
Learning: Greggs’ revenue mix is weather-sensitive, making summer heatwaves a challenge for its traditional hot offerings.

Commentary: The company’s reliance on hot pastries underscores why weather shocks can lead to wider financial adjustments, including pricing. This case study illustrates the external pressures behind the company’s decision.

Customer Comments (Collected Reactions)

Positive:
- “It’s still cheaper than Pret or Costa. Even with the increase, Greggs is my go-to for breakfast.”
- “Prices everywhere are going up — I’d rather Greggs raise 20p than close shops.”
Negative:
- “Greggs used to be the cheapest. Now I might just bring my own coffee from home.”
- “This is death by a thousand cuts. A bit more for coffee, a bit more for rolls. It chips away at loyalty.”
Neutral:
- “Honestly, I barely noticed the change. It’s still good value for money.”

Broader Economic Examples

Employer National Insurance Hike: Greggs cited higher employer NI contributions as a key factor. This regulatory change ripples through many industries — a sandwich shop in Leeds reported a £12,000 increase in annual payroll costs for 2024, forcing them to raise meal deal prices by 10p.
Wage Inflation: With the National Minimum Wage rising to £11.44/hour in 2024, businesses like Greggs face ongoing payroll pressure. A rival coffee chain reported staff costs increasing by 12% year-on-year, making small price hikes inevitable.
Consumer Squeeze: According to ONS data, households are still spending a higher share of income on essentials like rent and energy compared to 2019. For lower-income households, even small food price increases weigh heavily.

Expert Commentary

Retail Analyst at Shore Capital: “Greggs is walking a tightrope. Investors want margin protection; customers expect value. The chain’s brand rests on being accessible to all — every 20p rise must be justified by quality, convenience, or loyalty.”
Labour Economist: “Rising employer costs are not just accounting lines — they filter directly into consumer prices. Greggs is a case study in how government policy on tax and wages plays out in the high street.”
Consumer Advocate: “The risk here is not that Greggs becomes expensive, but that it loses the perception of being the cheapest option. That perception shift can alter buying behaviour dramatically.”

Conclusion: A Test of Value Loyalty

Greggs’ modest price rises on its popular breakfast deals illustrate the difficult balance between margin management and customer trust.

For customers like Mark and Sarah, the changes feel cumulative and noticeable.
For investors like Alan, they signal stability and prudence.
For competitors, they create openings to challenge Greggs’ dominance in the value segment.

The real test will be whether Greggs’ brand loyalty and convenience continue to outweigh incremental cost pressures. If customers keep walking through the door despite the extra 20p, the strategy will be judged a success. If not, Greggs could face a squeeze between investors demanding margins and customers demanding value.