Vegan snack helps keep Greggs on a roll after sales top £1billion for first time
Sales at Greggs have topped £1billion for the first time as the launch of its controversial vegan sausage roll helped drive a surge in customer numbers.
The bakery chain posted a 15% rise in pre-tax profits to £82.6million in 2018, with sales rising 7.2% to just over £1billion.
Company-managed shop like-for-like sales were up 2.9% in the period.
Greggs said that while the first half of 2018 was impacted by extreme weather, it was able to bounce back and perform ahead of expectations.
For 2019, Greggs hailed the "enthusiastic reception" and "extraordinary" level of social and general media coverage surrounding its vegan sausage roll, which has helped spur a spike in footfall.
Chief executive Roger Whiteside paid homage to the impact of the roll alongside the firm's full-year results.
"Whilst there are significant uncertainties in the months ahead, Greggs has started 2019 in great form, helped in part by the publicity surrounding the launch of our vegan-friendly sausage roll.
"We hope to continue benefiting from this strong momentum during the first half of 2019 before facing stronger comparatives later in the year.
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"We have a strong financial position which we plan to use to invest in Greggs' potential for further growth, whilst also delivering good returns for shareholders."
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.
Its popularity has already led to Greggs lifting its 2019 profit outlook.
Greggs was also helped by the growth of healthier options, hot drinks, breakfast and hot food and said that it has had a "very strong" start to 2019.
Senior market analyst Fiona Cincotta at www.cityindex.co.uk said: "It doesn't get much better for investors than this.
"Profits at Greggs are rising and the dividends are flowing, even during a time of heavy spending on the business that will support growth well into the future."High street retailers may be struggling, but the situation isn't so bad if they're selling fast food on the go, which isn't so exposed to online competition."Greggs has bolstered its appeal with a steady stream of popular product innovations, including a vegan sausage roll that attracted the perfect storm of publicity on its launch in January."It appears all the media controversy surrounding the launch has created the so-called 'halo effect', where the popularity of one product boosts sales of a company's other offerings.
"In Greggs' case, its vegan venture has drawn fresh attention to its pizzas, sandwiches, cakes and coffees."