Baker battles soaring costs

High street British baker Greggs today shrugged off the impact of soaring raw material costs to deliver a 12% hike in underlying pre-tax profits to £49m (€64m).

Despite the improvement in 2007 results, the sandwich and pasty retailer said it was still facing “substantial pressure” from the cost of energy and key ingredients, including flour, vegetable oils and meat.

The Newcastle-based group has mitigated the impact of cost increases through product price rises and greater efficiency.

The company also revealed improved trading at the start of this year, with like-for-like sales in the ten weeks to March 8 up 6.2%, higher than the 5.3% increase throughout last year. Total group sales increased 6.4% to £586m (€766m) in 2007.

Greggs said it has already seen benefits from the introduction of recent changes including longer opening hours during the week and an expansion in Sunday openings.