Greggs, the UK's leading bakery retailer, has seen it's BrandIndex scores increase over the past month, despite the rising price of wheat driving up prices.
The company's latest financial figures released on 10th August for the first 6 months of 2010 showed a 13.1% increase in operating profit, totalling £18.5m, up from £16.3m for the same period in 2009, so the company has succeed during a period when many other have struggled.
Despite the fact that the Newcastle based company said it believed that consumers would have less disposable in the second half of the year, Chief Executive Ken McMeikan stated that the company was on track to deliver 'another year of progress'.
Greggs' confidence comes despite the rising price of wheat, which has hit its highest level in two years because of the current drought in Russia and the flooding in Pakistan. While releasing its figures for the first 6 months of 2010, the company also suggested this may lead to a slight increase in the price of products it sells. Even though the current fluctuations in the price of wheat may lead to a more expensive sausage roll, the latest data from BrandIndex suggests that respondents think the standard of the food the Greggs sells warrants the extra cost.
At the beginning of August Greggs 'Quality' score, which is formulated after asking respondents whether a brand is good or bad quality irrespective of price, stood at 9pts and stayed around that level until 10th August. After that point, when the potential effects of the wheat crisis on Greggs' prices were discussed in the press, the brands 'Quality' measure increased to a high of 16pts.
Another positive sign for Greggs is that it's 'Value' score, which measures whether respondents believe a brand is good or bad value for money, has remained unaffected by the story. Standing at 29.6pts on 9th August, Greggs' rating had only fallen slightly to 28.8pts on 16th August.