Vegan sausage rolls help Greggs shares to a record high as profits set to soar
The controversial vegan sausage roll has helped North East bakery chain Greggs lift its 2019 profit outlook after driving a surge in customers through its doors.
Shares in the group rose 8% 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 cheer over 2019 figures came just a month after Greggs upped its expectations for 2018 - saying pre-tax profits for the year are set to be at least £88million.
Greggs hailed an "exceptionally strong" start to 2019 as the stir caused by the launch of the snack saw a jump in customer transactions.
The group, which has its headquarters in Jesmond, Newcastle, posted a 9.6% rise in like-for-like sales for the seven weeks to February 16, while total sales lifted 14.1%.
This compares with a 2.9% 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.