Positivity in the Face of Price Pressures

I noticed today that the price of the good old Sausage Roll has gone up from £1 to £1.15 – an increase of 15% at Greggs.

Despite this and other price increases Greggs’ sales are booming and according to the headline in an  article I also read at the same time, Greggs is ‘shrugging off rising prices.’ Sales jumped by 14.6% in the three months to October 2022. Again, quoting the article ‘this came despite the business passing on some of the soaring costs it has faced since the end of lockdown. Greggs said overall prices would rise by 9% this year.’

Despite a slew of warnings from High Street retailers Greggs kept its forecast unchanged with profits this year around £147 million – just up on last year’s £146 million.

So how do businesses like Greggs manage to put through a price increase and generate a zero negative effect in terms of business performance? The lesson here for all businesses – Greggs or the smallest SME – is to know what your brand/ company represents, the position it holds in the marketplace and what points of difference your offer provides to your target customer or client. Greggs feels confident in its business future because it has a point of difference from many of its competitors – they offer great value (who quibbles about the volume and quality of a Greggs product?) and they also offer a quick quality service which busy people, on the move, appreciate. They feel quite comfortable in telling the finance world that prices would rise by c9% this year as they are facing reality – not hiding from the ‘ugly truth’ which many businesses will. Their staff feel confident about the ‘new’ £1.15 Sausage Roll because it is of great quality and the fact that customers love it. They feel confident that it is the best on the market and certainly in the High Street. The company also feels confident in its future because, when things are tight, consumers will probably opt for a midday snack in town rather than a meal – and Greggs snacks are substantial.

With all businesses facing a cost increase in terms of goods and energy, to thrive they too must have confidence in what they offer. They must know what makes them different, what gives them the edge over competition beyond price – is it value for money, quality, speed of service, a unique product or what? What factors in the market could work in their favour? Before the real crunch comes, rehearse where your business has the edge – let your people all know where this is – and better still get them involved in helping determine what it is and also what advantages the business might gain from the situation. Confidence will build and the dreaded price increase becomes not a barrier but a continuation of business growth.