Vegan sausage roll furore helps Greggs bring home the bacon

Bakery chain Greggs said the launch of its controversial vegan sausage roll has helped it enjoy an "exceptional sales performance" at the start of the year.

Shares rose 7% after Greggs said publicity surrounding the launch had helped drive more customers through its doors - prompting it to lift its annual profit outlook.

The company said in a trading update that there were additional sales for savoury products including the vegan sausage rolls as well as its other "iconic sausage rolls and bakes".

Greggs said in a trading update that like-for-like sales for the seven weeks to 16 February rose by 9.6%, compared to a period last year when trading was affected by the "Beast from the East" weather system.

"The performance builds on the strong finish to 2018, and has been supported by extensive publicity surrounding the launch of the vegan-friendly sausage roll at the start of January," the company said.

"The rate of growth has eased slightly in February but the strength of trading is likely to have a material impact on the first half result for 2019."

Greggs said it now expected full-year underlying profit before tax to be ahead of previous expectations.

The launch of the vegan-friendly sausage last month created a flurry of attention - and anger - on social media, drawing comments from the likes of 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 campaigners Peta, calling for a vegan version, was signed by more than 20,000 people last year.

Laith Khalaf, senior analyst at Hargreaves Lansdown said: "The new vegan sausage roll has helped bring home the bacon for Greggs, prompting a spike in sales at the start of this year.

"The company has therefore upgraded its profit expectations for the coming year, and that's sent the share price up sharply.

"It's unclear how much of the boom can be attributed to sales of actual vegan rolls rather than simply the publicity associated with the launch.

"However catering for vegan diets is now rising up the priority list for many food retailers, with M&S recently launching its new vegan range."