This article is more than 1 year old

This article is more than 1 year old

Having won thousands of new fans with its vegan sausage roll, Greggs now wants to build on this growing popularity by making a move into the takeaway dinner market.

Roger Whiteside, the chief executive of Britain’s largest bakery chain, said the vegan pastry launched in January had helped change the perception of Greggs from “an old-fashioned bakery from the north” to a “modern food-on-the-go brand”.

Greggs plans to open several shops across the UK until 9pm, offering hot food, such as pizza slices. Most stores currently close between 6pm and 7pm.

“We want to see whether or not people will choose Greggs instead of another fast-food outlet, a takeaway or going home and heating up lasagne in the microwave,” Whiteside said, adding that the busiest period for Gregg’s Birmingham New Street outlet was 10pm to 11pm on Fridays.

“We want to try and do the same for evening as we did in breakfast. We weren’t in breakfast a few years ago and now we’re No 2 [in the takeaway market].” Only McDonalds sells more takeaway breakfasts.

Greggs said it had also overtaken Starbucks to become the third-largest takeaway coffee seller, behind Costa and McDonald’s, while only Tesco sells more sandwiches.

The business is handing shareholders a £35m special dividend after sales at established stores leapt 10.5% and profits jumped more than 50% to £40.6m in the six months to 29 June. Total sales rose 14.7% to £546m.

One in eight new customers had bought a vegan sausage roll, which has overtaken some doughnuts and other pastries to become one of the chain’s bestsellers. Traditional sausage rolls remain at No 1.

While other high-street operators are closing stores, Greggs is on track to open its 2,000th outlet in the next few weeks as part of plans for 100 new stores this year. Greggs has said it sees the potential for 2,500 outlets.

Whiteside said the company had not reached “peak Greggs” and had several avenues for growth. More vegan products were in development, including a vegan doughnut, and plant-based “milks”.

But he said the current pace of sales growth, partly helped by weather conditions, was unlikely to continue. “You shouldn’t expect more of the same of this type of number.”

The restaurant industry consultant Peter Backman said the market for takeaway dinners continued to rise but Greggs might find only a limited number of its locations suitable: “In central Newcastle or Birmingham or the inner suburbs of London this can absolutely work because people are less worried about the time when they eat, but I can’t see this working everywhere.”

He pointed out that Pret a Manger had backed away from a similar idea in 2015, although the cafe chain added waiters and wine rather than trying to compete on takeaways with the likes of McDonald’s and KFC.

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

Greggs has previously failed with new ideas such as Gregg Moment, a coffee shop-style outlet with seating, and the Gregg Delivered service which is only available in Newcastle and Manchester three years after it launched.

Backman said the business was now at a scale where it could experiment without too much risk. “I wouldn’t argue against Greggs. They have done a lot of things right,” he said.

Shares in Greggs slid more than 6% to £22.74 as the company said it was not upgrading profit guidance for the year, after a series of upgrades.

Instead the company is paying out the special dividend and increasing investment, bringing forward plans for robot-led automation at its pastry manufacturing site in Newcastle and developing ideas such as online ordering for collection and home delivery.

“We want to invest in the exceptional year to provide the basis for long-term growth in the future,” Whiteside said.