Greggs warns of rising costs and impact of staff shortages due to supply crisis

It comes after Greggs ran out of some menu options in shops just over a month ago due to delivery issues caused by the lorry driver shortages. Businesses across the UK have been suffering from a lack of workers

Greggs has warned of increasing cost pressures and the impact of staff shortages following the coronavirus crisis.

The baked goods giant stopped short of saying whether its “inflation pressures” would see customers paying more for its food.

It comes after Greggs ran out of some menu options in shops just over a month ago due to delivery issues caused by the lorry driver shortages.

Greggs said in its financial results: “Greggs has not been immune to the well-publicised pressures on staffing and supply chains and we have seen some disruption to the availability of labour and supply of ingredient.

“Food input inflation pressures are also increasing. Whilst we have short-term protection as a result of our forward buying positions we expect costs to increase towards the end of 2021 and into 2022.”

Greggs is one of many businesses experiencing increased costs across the UK – largely down to a combination of factors pushing up its prices.

For example, shipping costs are now more expensive following huge delays and congestion earlier this year, while the HGV driver shortage has forced firms to push up wages to entice new workers.

But despite the supply chain crisis, Greggs says it remains optimistic and revealed its stores have rebounded to trade ahead of pre-pandemic levels.

The bakery chain said like-for-like sales increased by 3.5% in the third quarter of the year, against the same period from 2019.

Greggs benefited from “staycations” during August with this knock-on effect continuing into September as people returned to offices.

It said its full-year performance is expected to surpass previous expectations, as it revealed plans to double its turnover to almost £2.5billion in the next five years.

Greggs, which has more than 2,100 stores across the UK, will also open more new shops than originally planned.