Greggs has credited the fanfare of publicity around its vegan sausage rolls for a surge in sales that has sent the value of the company to an all-time high.
The UK’s biggest bakery chain said it had made “an exceptionally strong start to 2019” with sales climbing nearly 10% in the seven weeks to 16 February.
The Quorn-filled vegan alternative to the traditional meat pastry – which was developed after 20,000 people signed an online petition organised by animal welfare group Peta that called on the baker to produce a vegan version of its bestselling item – went on sale on 3 January. It had taken more than a year to perfect and its launch coincided with Veganuary, a growing movement that encourages people to try plant-based diets during January.
Not everyone welcomed the new vegan snack. The Good Morning Britain presenter Piers Morgan was not a fan, tweeting: “Nobody was waiting for a vegan bloody sausage, you PC-ravaged clowns”. Greggs PR department, however, had a swift response, replying: “Oh hello Piers, we’ve been expecting you.”
Greggs said the publicity surrounding the new meat-free savoury had boosted the number of shoppers visiting its bakeries , boosting sales of both “the vegan-friendly sausage roll and our other iconic sausage rolls and bakes”. Trade has been so brisk that Greggs said profits would be higher than expected and shares in the company climbed nearly 7% to an all-time high of £17.13, valuing the Newcastle upon Tyne-based business at more than £1.8bn.
It said the rate of growth had eased slightly in February but was still likely to mean profits this year would be higher than previously expected.
Last month, Greggs said it had been struggling to keep up with demand for the £1 vegan rolls after selling hundreds of thousands in the first week.
Tuesday’s trading update was the third time in three months that Greggs has told the City that its profits would be higher than anticipated. At the same time, the company announced it was upgrading pre-tax profit expectations. It said it expected to make an annual profit of at least £88m for 2018, having already updated its guidance in November, when it said profits would be at least £86m.
An upgrade last month was the result of bumper sales of its festive bakes and mince pies, as well as its hot drinks and breakfast range.
Laith Khalaf, a senior analyst at Hargreaves Lansdown, said: “The new vegan sausage roll has helped bring home the bacon for Greggs, prompting a spike in sales at the start of this year.
“It’s unclear how much of the boom can be attributed to sales of actual vegan rolls rather than simply the publicity associated with the launch. However, catering for vegan diets is now rising up the priority list for many food retailers, with M&S recently launching its new vegan range, Plant Kitchen.
“This isn’t just a flash in the pan for Greggs either; it builds on strong performance last year and demonstrates it is still possible for bricks-and-mortar retailers to earn a crust on the UK high street.”
