Greggs sales up on new products, but warns Iran war could hit costs

(Sharecast News) - Shares in Greggs jumped on Tuesday as the bakery chain held annual guidance and said like-for-like sales at the start of the year had improved but also warned that Iran war could push costs higher by the end of this year.

Like-for-like sales had FL sales rose at company-managed shops rose 3.3% in the latest 10 weeks of its financial year, supported by new menu items such as chicken rolls and salads.

"We have also strengthened our hot food and pizza offer with introductions such as the Tandoori Chicken Pizza Slice, expanding choice with bolder, contemporary flavours," the company said in a trading update on Tuesday, sending Greggs shares up 5% in early trade.

However, it warned that should the war become prolonged the food retail industry "will likely see higher overall cost inflation through the end of 2026 and into 2027".

The US-Israeli war on Iran and Lebanon has further dented UK consumer confidence and led to higher energy costs as shoppers cut back on discretionary spending.

"Our forward buying of key commodities continues to provide protection against increased inflation in the near term; we have forward purchase agreements in place representing circa five months of cover for our food and packaging needs and 85% of our 2026 energy and fuel requirements are fixed in price. In addition, circa 50% of our 2027 energy and fuel requirements are fixed," Greggs said.

Reporting by Frank Prenesti for Sharecast.com

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