An in-depth analysis of Greggs PLC (LSE:GRG) sandwich prices leads investment bank Jefferies to suggest the baker's shares remain worth buying.
Prices have now increased by circa 12% since May 2020, much less than its competitors' average of around 20%, which the analysts said was "comparing favourably" from a competitive offering point of view.
Since February 2022, Greggs' sandwich price increases of around 9% have also been lower than the competitors' average at 12%.
Retail trends suggest to the analysts that the Newcastle-headquartered chain is "in solid health", with strong performances in recent weeks coinciding with the launch of new menu items at the end of April of a vegan Mexican chicken-free bake, a new raspberry muffin and some Chicken Feast deals.
A trading update from the FTSE 250-listed company last week showed like-for-like sales growth of 17.1% for the 19 weeks to the middle of May.
Directors reiterated their expectation for 9-10% full-year cost inflation, with profit guidance unchanged.
Sales of hot food including chicken goujons and wedges were delivering "particularly strong growth", while a net 37 shop openings so far.