This article is more than 1 year old

This article is more than 1 year old

Greggs has raised its profit guidance for the third time this year, boosted by demand for its vegan sausage rolls and an increase in customers.

The bakery chain said a strong start to 2019 had continued in recent weeks after it ramped up production of its best-selling Quorn-filled roll following a failure to keep up with demand when it first launched in January.

Shares jumped more than 13%, the best performer on the FTSE 100, a record high after Greggs reported an “exceptional” 11% rise in like-for-like sales – those at shops open for more than a year – in the 19 weeks to 11 May.

Greggs said that despite an increase in some of costs, profits for the full-year were now likely to be “materially higher” than previously expected.

Greggs sales top £1bn for first time as it bucks high street slowdown Read more

Roger Whiteside, the chief executive, said: “More people are coming. Awareness of the brand has never been higher and the vegan roll has helped with publicity and encouraging people to come and have a look at what we’re doing.”

Greggs has in recent years persistently bucked the wider trend on UK high streets, where some retailers are struggling to compete as sales shift online and the cost of running stores rises.

Whiteside said that in the six years since he was appointed chief executive, Greggs had worked hard at getting consumers to think about it as a food-on-the-go chain, rather than a more traditional bakery.

The chain has 1,969 shops and expects to pass the 2,000 mark this year. Roughly 65% of Greggs’ stores are on high streets, with the remaining 35% located in retail and office parks and in travel locations such as railway stations and petrol forecourts.

Whiteside said the aim was to change the emphasis of the business so that it is 60% non-high street by the time it has 2,500 shops open.

Greggs said its breakfast range, including Fairtrade coffee and other hot drinks, continued to grow strongly. Its post-4pm pizza deal, where customers can pick up a pizza slice and a drink for £2, is also proving a hit.

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The retailer was surprised by the popularity of its vegan roll when it was launched in January, quickly selling out as it capitalised on “veganuary” and the growing demand for plant-based alternatives to meat.

The roll is now available in all of Greggs’ shops. The traditional sausage roll is still the chain’s best-seller, but the meat-free version is now in the top five, Whiteside said.

Greggs had a milestone year in 2018, with sales exceeding £1bn for the first time.

Russ Mould, investment director at AJ Bell, said: “Since the company launched its vegan-friendly snack in January 2019 it has upgraded guidance several times, unveiled a special dividend and added around £700m to its market value.

“Not a bad contribution for a humble bit of pastry filled with a meat substitute. This is not the only reason like-for-like sales have been shooting the lights out at Greggs; investment in the range and quality of products it sells in recent years has turned it from a humble budget baker to a food-on-the-go destination for busy consumers.”