Bakery chain Greggs today warned that rising wheat prices could lead to customers paying more for its products in the coming months.
The Newcastle-based firm said it expected an increase in "ingredient cost" after severe droughts in Russia triggered a jump in wheat prices.
The group's warning came alongside a rise in pre-tax profits for the first half of the year, up 12.3% on a year earlier to £18.5 million.
Greggs has performed well during the downturn after aiming its promotional activity at consumers with less disposable income.
And its affordable products and deals have continued to sell well.
In the first half of this year, the company sold more than two million of its £1.80 meal deals while 4.5 million breakfast rolls have been sold since Greggs launched the range in February.
However, chief executive Ken McMeikan added: "The pressure on the trading environment looks likely to increase in the second half and we remain focused on managing costs tightly.
"We now expect and increase in ingredient cost inflation in the second half of the year, following the recent rise in wheat prices."
But Mr McMeikan said the group believed the increase in wheat prices was an "over-reaction" to events in Russia, which has banned all grain exports until December 31.
Mr McMeikan said the company expected wheat prices to be around £120 per tonne, but it was currently trading between £158 and £170 per tonne.
"Our view is that there has been an over-reaction, and we would hope prices would come back down," he said.
"If the prices stay around £158 to £170 per tonne, there could be a small price increase in the products in our stores."