Greggs has been going gangbusters over the past year as recession-hit consumers traded down from upmarket sandwich shops to its affordable hot fare. But this could all be about to change if the government’s much-maligned ‘pasty tax’ goes ahead. The move will add at 20% VAT rate to all ‘above room temperature’ products sold in Greggs, hiking prices across the board.
The bakery has been fighting against the rise since it was announced in the Budget earlier this year and has amassed some 300,000 customer signatures opposing the legislation. ‘Our customers think that this is the wrong tax,’ says CEO Ken McMeikan. ‘They're completely confused by it. At a time when the consumer is under enormous pressure, our customers remain clear - this is something they do not want.’ But when did anyone ever volunteer to pay more tax?
McMeikan is due to present his reworking of the pasty tax proposal to David Gauke, exchequer secretary to the Treasury, tomorrow. He claims his draft legislation is far ‘simpler and more workable’. MT pictures a single sheet of A4 with the words ‘No VAT’ scrawled in red ink…
April aside, however, this should be a good year for Greggs. Food and fuel costs may be rising but the Diamond Jubilee, London 2012 Olympics and Euro 2012 Championship all present prime promotional opportunities. For what kind of churl could not be persuaded to part with 99p for a Right Royal Bake? A Forward Sausage Roll? Or an apple turnOver Time?