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Inflationary pressures reducing, says Greggs, as Sainsbury’s reports rise in Christmas sales
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The UK bakery chain Greggs has said that inflation pressures are “reducing”, as it reports a strong rise in sales last year.

Greggs, which sells steak bakes, sausage rolls, doughnuts, wraps and breakfast rolls, has posted like-for-like sales of 13.7% for the past year.

Total sales jumped almost 20% to £1.8bn, boosted by a flurry of store openings – a net increase of 145 last year as Greggs targeted retail parks and travel hubs.

Inflation has pumped up retailers’ sales growth in the last couple of years. Greggs’ sales growth slowed in October-December, though, with like-for-like sales up 9.4% – because of a “reduced contribution from price inflation”.

That slowdown in price rises should continue, Greggs suggested, in a boost to consumers.

Greggs said: "As expected, inflationary pressures are reducing, and with good forward cover on food, packaging and energy we anticipate a more stable cost base in the coming year.

"Wage inflation remains, although higher rates of pay across the economy will also provide support to consumer incomes."

Official data has shown that consumer price pressures slowed last year, with inflation slowing to 3.9%.

Greggs also reported high sales of its festive bake, chocolate orange muffin and Christmas lunch baguette in the fourth quarter of last year, while pizza sales continue to grow, too.

Greggs plans to increase its store numbers by up to 160 this year.

The bakery chain says it ended last year with a cash position of £195m, which it will invest in growing its shop estate and also its supply chain capacity.

Greggs says the pipeline of new shop opportunities remains strong.

It currently has 2,473 shops trading, after opening 220 new shops in 2023, closing 33 and relocating 42 (giving a net increase of 145 last year).

There are Christmas trading figures from the supermarket chain Sainsbury's this morning. They also point to easing inflation pressures.

It has reported a jump in sales over the key Christmas period, with improved grocery sales volumes as food and drink inflation slowed.

Grocery sales in the last 16 weeks rose by 9.3%, while sales over Christmas were 8.6% higher. Sainsbury’s said stronger volume growth offset lower inflation, and is sticking with its existing profit forecasts.

Sainsbury’s said: "Our consistent focus on delivering great value, innovation, quality and service has driven sustained sales growth despite significantly lower inflation, with volume growth ahead of the market every week since March."

However, the firm witnessed a drop in trade for clothing and in its Argos business.

Sales at Argos, the catalogue business, fell by 4.2% in the six weeks over Christmas (to 6 January), suggesting consumers cut back in the cost of living squeeze.

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• 9.30am GMT: World Economic Forum releases its global risks report 2024
• 2.15pm GMT: Treasury committee to quiz the Bank of England governor, Andrew Bailey, and senior colleagues

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Elon Musk doesn’t understand Sweden’s unions. If he did, he’d work with them
Elon Musk doesn’t understand Sweden’s unions. If he did, he’d work with them
 

John Crace

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