Vegan sausage roll helps ‘bring home the bacon’ for Greggs

Greggs has lifted its profit outlook after the launch of a vegan sausage roll helped drive additional custom at the bakery chain.

Greggs sells some 1.5 million sausage rolls a week but introduced the new product due to public demand. Picture: Greggs

The group, which has been opening new stores in out-of-town locations and on business parks, said trading had been boosted by “extensive publicity” surrounding the launch of the new savoury product at the start of January.

In a stock market update, it highlighted an “exceptionally strong” start to 2019 as the controversy caused by the launch of the non-meat sausage roll led to a jump in customer transactions.

Sign up to our daily newsletter

The i newsletter cut through the noise

It posted a 9.6 per cent hike in like-for-like sales for the seven weeks to 16 February, while total sales were up by 14.1 per cent.

This compares with a more modest 2.9 per cent increase in like-for-like sales a year earlier, when trading was hit by extreme weather.

Greggs told investors: “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, particularly as comparative sales growth for 2018 was weak due to the extreme weather.

“Sales comparatives then strengthen in the second half of the year. 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 the Newcastle-headquartered firm, which has more than 1,700 outlets, 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 some 1.5 million sausage rolls a week but introduced the new product 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, prompting a spike in sales at the start of this year.

“The company has therefore upgraded its profit expectations for the coming year, and that’s sent the share price up sharply.

“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.”