Poll: Are you prepared to pay more for goods to support the living wage?
Baker Greggs warned the new national living wage will put pressure on the group to raise the prices of its pasties and sausage rolls. Are you prepared to pay more for goods to support the living wage?
The Newcastle upon Tyne-based chain, which runs 1,668 outlets, said it was not planning price hikes, but cautioned over the impact of a higher wage bill on the business.
Greggs currently pays its shop staff £7.11 an hour, however Chancellor George Osborne said in his July Budget the UK's hourly minimum wage from April next year will lift to £7.20 for over 25s, from its current level of £6.50, and to at least £9 an hour by 2020.
Roger Whiteside , chief executive of Greggs, said: "Wage rises will increase inflationary pressure in the business. It is not our intention to raise prices. But ultimately we will see how the market goes."
The warning came as the firm posted its latest trading update, revealing a better-than-expected 4.9% rise in like-for-like sales in the 13 weeks to October 3, helped by strong demand for new additions such as its Aberdeen Angus spicy meatball melt baguette and mildly spiced chicken curry soup. Shares lifted more than 7%.
