Greggs Rides Success Of Vegan Sausage Roll With 58% Profit Jump
Vegan sausage rolls lured more people into the bakery stores of Britain's Greggs, helping drive a 58% first half profit rise as they also snapped up coffees, sandwiches and cakes.
Greggs launched its vegan roll, with a filling made with protein-based Quorn, after a customer campaign and its arrival was enthusiastically greeted on social media and the bakery and food-to-go retailer initially raced to meet demand.
Chief Executive Roger Whiteside said on Tuesday Greggs was having an "exceptional year", with sales up nearly 15% in total.
Subdued Consumer Spending
The strong results come as many British high-street chains are going out of business or closing stores in the face of subdued consumer spending and a shift to online shopping.
"It's driven by the increase in customer numbers we've seen this year," Whiteside told Reuters. "That whole trend started in the second half of last year, and then when we got the vegan sausage roll out there in January it took another leap forward."
Whiteside said the vegan sausage roll publicity was good for Greggs as new customers sampled the rest of its ranges, with sales of its traditional sausage roll also rising. Demand for the vegan product had remained strong, he added.
Greggs, which trades from around 2,000 outlets in the UK, was looking into adding more vegan products, along with new hot sandwiches and other food-to-go options, Whiteside said.
Greggs reported underlying pretax profit of £40.6 million ($49 million) in the six months to 29 June, up from £25.7 million in the same period last year.
Total sales rose 14.7% to £546 million, while like-for-like sales at company-managed shops were up 10.5%.
Shares in Greggs, which an all-time high of 2,496 pence this month, were trading down 2% at 2,331 pence at 0811 GMT.
Whiteside said Greggs would increase its investment in initiatives like selling more hot food, opening stores later in the evening and extending trials of click and collect, as well as delivery with partners Deliveroo and Just Eat.
The company, which declared a special dividend of 35 pence a share in addition to an interim dividend of 11.9 pence, kept its profit expectations for the year unchanged.