Greggs has been warned that the booming popularity of lunchboxes will hit them right in the sausage rolls.

Oriel Securities this week maintained its ‘sell’ recommendation ahead of Greggs’ interim results briefing on 9 August, and predicted profits would be down 3% to £18m. The recommendation comes in the wake of revelations in The Grocer that there had been a 2.9% increase in lunchbox consumption among adults (Focus on Lunchbox, 23 July).

“The average lunchbox costs £1.40,” said analyst Jonathan Pritchard. “While the £1.99 meal deal at Greggs is attractive, it not only must be squeezing internal gross margins, it is at risk of being undercut by those choosing to make their own lunches.

“If people are willing to trade down from Asda to Lidl or Aldi, many will also be willing to cut their own sandwiches in order to save 50p a day,” Pritchard said.

He also pointed to the recent profit warnings from Cranswick and bakery products group CSM.

“We have been wrong about Greggs in the past, but stick to our guns with our negative stance in the light of the mounting raw material pressures,” Pritchard added.