📈Next and Greggs set to hike prices as costs surge

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7th January 2022

Bite-sized business news from the UK and beyond
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Today's stories
  • Next and Greggs set to hike prices as costs surge
  • British food meal company gets $100m investment
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Next and Greggs set to hike prices as costs surge


What’s going on?
Your next shop at Next and Greggs will set you back more. Two of the UK’s biggest names on the high street have warned that higher wage bills and raw material costs will mean they will put up prices for consumers this year.


Why is this important?
Next had a good Christmas with sales of full-price items up 20% in the two months to 25 December compared to 2019 levels. It said strong demand for smart clothes and party wear drove performance. 

Numbers were well ahead of investor expectations and for the fifth time in 10 months Next upgraded its profit targets.

Pre-tax profits for the year to March are now forecast to be £22m higher than previously projected £822m.

But the retailer is planning to raise prices by up to 6% this year, blaming labour shortages in warehousing and technology and higher manufacturing costs.

In the run up to Christmas Greggs saw a downturn in trade as Omicron fears kept consumers off the high street. 

The spread of the new variant also led to some outlets closing due to staff shortages and supply chain problems.

The baker reported a 3.5% drop in sales in the final three months of the year compared to the previous quarter.

It said that prices would go up by 5-10p on some items to combat the rising cost of ingredients and staff.

 
Takeaway
Next and Greggs were among the first retailers to report their trading over the crucial festive period. It’s likely that it won’t be the last time we hear about retailers passing on rising costs to consumers this year, in another blow for household budgets. 
FOOD
British meal prep company gets $100m investment

Softbank Vision Fund, the world’s biggest tech investor, has taken a $100m stake in British meal delivery firm Gousto. 

Gousto was founded in London 10 years ago by two investment bankers and offers subscriptions to meal kits including ingredients and recipes.

The business ballooned during the pandemic as consumers ate at home more during lockdown. Sales grew 129% in 2020 to £189m. In the first three months of 2021 it sold more than 25m meals, equivalent to three meals every second.

It’s raised several rounds of investments with backers including celebrity personal trainer Joe Wicks. Last year it became a unicorn when it reached a $1bn valuation.

The funding from Softbank is the latest in a series of investments it’s made into British tech firms. It’s backed the likes banking app Revolut and chip designer Arm.

The news raises speculation that Gousto will look to list on the stock market sometime in the future.
Stat of the day

A record 190,727 new battery electric cars were registered in the UK in 2021 - more than the previous 5 years combined
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