Greggs has pledged to make £15m in cost savings per annum by 2014, as it continues to work hard to mitigate against rising commodity prices.

In its preliminary results for the 52 weeks to 31 December 2011, released this morning, the company said it “bore substantantial cost increase in commodity prices during the year, which affected most of our key ingredients as well as our energy-related production, distribution and retailing costs”.

Greggs, which unveiled a 5.8% increase in sales to £701m in 2011 and reported that like-for-like sales for the same period had remained positive at +1.4%, revealed it had made £5m of savings in the business last year. It explained: “These were generated by further improvements in the effectiveness of purchasing, and continued overhead savings following the centralisation  of our business.”

It added that work on its supply chain cost reduction programme was ahead of schedule and it expected to hit its target of £10m annual savings by 2012, two years ahead of schedule and, in turn, increase this to £15m by 2014.