Two Consumer Stocks Showing Resilience Amid Inflation: GRG & PETS

Section 1: Introduction

Overview & Key Concepts:

Inflation is the gradual loss in purchasing power, primarily due to an increase in the price levels of goods and services over a given period.

• Inflation: A continuous rise in the overall price level of goods and services, which diminishes the purchasing power of money.
• Deflation: A decline in the general price level, which raises the real value of money but can discourage spending and lower business earnings.
• Disinflation: A reduction in the rate at which prices are increasing prices still go up, but more slowly than before.
• Stagflation: An economic condition marked by slow growth, elevated unemployment, and high inflation occurring simultaneously, making policy responses difficult.

Drivers and Causes of Inflation:

• Demand-Pull Inflation: Occurs when demand for goods and services exceeds supply, leading to price increases.
• Cost-Push Inflation: Results from rising production costs, such as wages and raw materials, causing producers to raise prices.
• Built-In Inflation (Wage-Price Spiral): Happens when workers demand higher wages to cope with increased living costs, leading to further price hikes in a self-reinforcing cycle.

Inflation Data for UK - July 2025

• The UK Consumer Prices Index rose slightly to 3.8% in July 2025, up from 3.6% in June, according to the Office for National Statistics (ONS). This uptick may lead the Bank of England to maintain its interest rate at 4.00%, pausing potential rate cuts. While this has fostered cautious optimism in the markets, any further rise in inflation could postpone easing measures and dampen investor sentiment.

Inflation Report Coverage:

• The inflation report underscores the uneven impact of inflation across sectors, with value-oriented and defensive areas—such as Energy, Materials, Consumer Staples, Healthcare, Utilities, select Financials, and REITs with inflation-linked leases—tending to perform better, while rate-sensitive sectors like Consumer Discretionary and high-growth Tech often lag.
• The report emphasizes companies with resilient business models, healthy financials, strong free cash flow, and consistent ROE, capable of passing on rising costs to customers to preserve margins. It aims to highlight stocks positioned to weather inflation through both capital appreciation and dividend income, reinforcing the value of diversified sector exposure.

Section 2: Company Overview

Greggs PLC (LSE: GRG) is an FTSE 250 index listed British food-on-the-go retailer that employs nearly 25,000 people and operates over 2,200 shops.

Kalkine’s Inflation Report covers the Investment Highlights, Key Financial Metrics, Risks, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

2.1 The Key Positives, Negatives, Investment Highlights, and Risks

Section3:  Financial Highlights

 3.1 Key Financial Highlights

Section 4:  Key Metrics

Section 5:  Stock Recommendation Summary

5.1 Valuation Methodology (Illustrative): Price/ Earnings Relative Valuation approach

5.2 Price Performance and Stock Recommendation

The stock has witnessed a downside of ~18.15% in 3 months and ~8.39% over the last 6 months. Moreover, stock is trading below the average 52-week high price of GBX 3,250.00 and 52-week low price of GBX 1,499.00.

5.3 One-Year Technical Price Chart

5.4 Technical Summary

Section 2: Company Overview

Pets at Home Group PLC (LSE: PETS) is an FTSE 250 listed, UK-based company operating in the pet care industry. It offers a range of products, services, and guidance for pets and their owners. Its offerings are accessible online and through around 450 pet care centers, many of which feature veterinary clinics and grooming salons. Additionally, the company runs a small animal veterinary network comprising roughly 440 general practices, located within its centers and at independent sites.

Kalkine’s Inflation Report covers the Investment Highlights, Key Financial Metrics, Risks, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

2.2 The Key Positives, Negatives, Investment Highlights, and Risks

Section3:  Financial Highlights

 3.1 Key Financial Highlights

Section 4:  Key Metrics

Section 5:  Stock Recommendation Summary

5.1 Valuation Methodology (Illustrative): Price/ Earnings Relative Valuation approach

5.2 Price Performance and Stock Recommendation

The stock has witnessed a fall of ~14.19% in 3 months and ~4.07% over the last 6 months. Moreover, the stock is trading below the average 52-week high price of GBX 317.00 and 52-week low price of GBX 193.90.

5.3 One-Year Technical Price Chart

5.4 Technical Summary

Note: This report may be updated with details around fundamental and technical analysis, price/ chart in due course, as appropriate.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 05 September 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Note 6: Dividend Yield may vary as per the stock price movement.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.