Yahoo Finance Greggs profits still on a roll with a boom in its vegan snacks
The runaway success of the vegan sausage roll has resulted in bumper annual profits at the UK’s biggest bakery chain Greggs.
The vegan sausage roll was launched in early January 2019 to coincide with Veganuary, a movement that encourages people to embrace plant-based diets during January and has been a big bestseller ever since.
The firm posted a 27% rise in 2019 pre-tax profits excluding one-off charges to £114.2m. Like-for-like sales grew by a record 9.2%. Roger Whiteside, the chief executive, hailed 2019 as an “exceptional year” for Greggs.
This year, Greggs launched a vegan steak bake and a vegan doughnut in response to consumer demands for more vegan choice, and the Quorn-filled steak bake has become its second-best-selling vegan item after the vegan roll.
Greggs has tapped into the growing popularity of plant-based food. Almost a quarter of all new food products launched in the UK last year were labelled vegan, and the number of Britons who have eaten food containing meat substitutes rose from 50% in 2017 to 65%, according to the market research firm Mintel.
Greggs’ traditional pork sausage rolls are still one of its best sellers with 2.5m sold every week.
Greggs is now trading from 2,050 shops, up nearly 100 from the previous year, and is rolling out a delivery service in partnership with Just Eat. The company is considering paying another special dividend and will make an announcement in July. Last year it paid out £35.5m to shareholders via a special dividend.
Its 25,000 staff were handed a £300 “thank you” bonus each in January, although some workers get to keep just a quarter of the bonus as a result of universal credit deductions. Greggs said it would share a further £12.8m of profits with employees. All staff benefit from the 10% profit share agreement. The amount they receive will depend on how long they have worked for the company and how many hours they work.
Whiteside said: ”We made a very strong start to 2020 in January, but in February saw a significant slowdown in sales growth as a result of the storms that have affected the UK. There is some uncertainty in the outlook, particularly given the potential impact of coronavirus.”
The storms in February, which brought strong winds and floods to swathes of Britain, caused some disruption at one of Greggs’ factories. It was the wettest February since records began.
While conditions for UK retailers remain tough amid a shift to online shopping and fragile consumer confidence, the food-on-the-go sector continues to grow. It is estimated to be worth £24bn and grew by 3.7% last year, according to market research firm NPD.