Greggs says it is aiming to become more efficient

Greggs made the comments as it unveiled pre-tax profits of �49m for 2007, just ahead of market expectations, and a 12% increase from 2006.

The Newcastle-based company's 2007 revenues rose 6.4% to �586m.

It added that 2008 had started well, with a 6.2% increase in same-store sales in the 10 weeks to 8 March.

Greggs said it was benefiting from longer opening hours and new menus.

"We will work hard to mitigate the impact of cost increases through greater efficiency and, in recovering higher costs in the market place, shall take account of consumer confidence and the competitive environment," said Greggs chairman Derek Netherton.

"Overall, I expect that 2008 will be another year of steady progress for the group, and will confirm that we have established a strong platform for future growth."