Bakery chain Greggs has warned that its prices could go up for a second time this year as it faces surging costs. Higher prices for food, energy and staff, plus tax changes mean the company's own costs will rise by between 6% and 7% it said. The chain, known for its sausage rolls and steak bakes, put prices up at the start of the year and it expects "further changes" to be necessary. The UK cost of living is rising at the fastest pace for 30 years. Greggs said the cost of raw materials had gone up while energy prices are also soaring. While it has locked in prices for some commodities ahead of time, the company said future costs remain "uncertain". Greggs said that overall wages at the company increased by 3% last year, and it had brought forward a planned 2022 pay rise by five months, adding £4.5m to its costs. While average pay in the UK has been going up, it has been lagging behind increases in the cost of living - adding to the squeeze on households' finances. The chain said rising costs "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," it said, adding that it did not expect a "material" rise in profits for the year ahead. The comments triggered a near 9% fall in Greggs' share price to a one-year low of £20.96. The business swung back to a profit last year after taking a hit in 2020 when many of its shops were closed for much of the year due to the pandemic. Profit before tax rose to £145.6m for the year to 1 January, compared to a £13.7m loss in the previous 12 months.
