Greggs cools price fears as it digests living wage

Greggs today quelled fears that the National Living Wage would lead to more expensive sausage rolls and pasties, saying it was “comfortable” with its rising wage bill.

Last month shop assistants at the Newcastle-based baker saw their pay rise to £7.47 an hour at the same time as the official minimum wage was increased to £7.20 for over-25s.

Finance chief Richard Hutton said Greggs had “dealt with the first hurdle of the living wage quite well” and wasn’t “chiselling away at other benefits” for staff, like breaks or profit-sharing to compensate.

However with the minimum wage set to rise to £9 an hour by 2020, Hutton said there was a chance prices could be affected in the longer term, but management was “working very hard at the moment to try and avoid that”.

Hutton also said trading conditions had improved after a “softer” March helped slow same-store sales growth to 3.7% in the first 18 weeks of 2016 from 6% last year. Shares rose 48p to 1116p.