The launch of a controversial vegan sausage roll has helped bakery chain Greggs to lift its 2019 profit outlook after it reported a surge in customers through its doors.
Shares in the group rose 8 per cent to a new record high after Greggs said trading had been boosted by “extensive publicity” surrounding the launch of the new savoury product at the start of January.
The positive news about the 2019 figures came a month after Greggs upped its expectations for 2018 - saying pre-tax profits for the year are set to be at least £88 million.
Greggs hailed an “exceptionally strong” start to 2019 as the stir caused by the launch of the snack created a jump in customer transactions.
The group posted a 9.6 per cent rise in like-for-like sales for the seven weeks to February 16, while total sales lifted 14.1 per cent.
This compares with a 2.9 per cent hike in like-for-like sales a year earlier, when trading was hit by extreme weather.
Greggs said: “The rate of growth has eased slightly in February but the strength of trading is likely to have a material impact on the first-half result for 2019.”
It added: “Overall the board now anticipates that 2019 full-year underlying profit before tax (excluding exceptional charges) is likely to be ahead of its previous expectations.”
January’s news that Greggs was to sell a vegan-friendly sausage roll drew a flurry of responses online, including comments from Good Morning Britain TV host Piers Morgan and comedian Ricky Gervais.
Greggs sells 1.5 million sausage rolls a week but created the new option due to public demand after an online petition by Peta, calling for a vegan version, was signed by more than 20,000 people last year.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said the new vegan sausage roll has helped “bring home the bacon” for Greggs.
He said it was clear that adding vegan options is becoming a top priority for food retailers, following on from the recent launch of Marks & Spencer’s new vegan range Plant Kitchen.
“This isn’t just a flash in the pan for Greggs either, it builds on a strong performance last year, and demonstrates it’s still possible for bricks and mortar retailers to earn a crust on the UK high street,” he added.
Paul Hickman, analyst at Edison Investment Research said: “Greggs’ vegan sausage roll has already contributed to an upgrade in profit expectations for 2019.
“Hard on the heels of its last upgrade for 2018, in January, the company is now guiding to still higher profits for this year.
Mr Hickman added: “It seems the publicity surrounding the launch of the vegan sausage roll, which included a YouTube video simulating an Apple launch and derogatory comments by Piers Morgan, succeeded in its aims of bringing more customers into the stores, resulting in a ramp-up in transactions.
“Customers were buying both the vegan sausage rolls and regular ones along with other savoury products.
“This breakneck growth rate has pulled back slightly in February but should still leave the first half materially ahead, against a weak comparative as a result of last year’s extreme weather. “