Greggs shares soar as vegan-friendly sales surge

Shares of Greggs, the Newcastle-based bakery and “food-on-the-go” retailer, rose about 15% on Tuesday after it said in a trading update its total sales rose 15.1% in the first 19 weeks of 2019.

Greggs said it now expects “materially higher” sales for the 2019 year as a whole.

“In our preliminary results announcement on 7 March we reported a very strong start to 2019, with company-managed shop like-for-like sales growth of 9.6 per cent in the first seven weeks of the year,” said Greggs.

“This built on a strong finish to 2018 and was further boosted by the publicity surrounding the launch of our vegan-friendly sausage roll. 

“Sales since then have continued to grow very strongly, helped by the roll-out of vegan-friendly sausage rolls to all shops following limited availability in the early part of the year when demand outstripped supply.

“Other product categories have also shown good growth as customers have recognised the investment made in our product range and quality, and the shop environment in recent years …”

In its outlook, Greggs said: “The exceptional level of like-for-like sales growth that began in January has been sustained in the months that have followed, driven by increased visits to our stores. 

“Looking forward, the sales comparatives from 2018 become progressively stronger but we now anticipate materially higher sales for the 2019 year as a whole than we had previously been expecting.

“Whilst there have been some increases in input costs, we expect overall cost inflation to be broadly in line with our plans for the year. 

“In the balance of the year we plan to increase investment in strategic initiatives that will deliver further long-term growth.

“Taking all this into account, the board believes that underlying profits (before exceptional costs) for the year will be materially higher than its previous expectation.”