Greggs, the High Street's Answer to Nigel Farage
(Bloomberg Opinion) -- Brexit. Trade wars. Domestic political uncertainty and global economic jitters. But there’s one constant: the Greggs sausage roll.
The bakery chain said Tuesday that sales and profit before exceptional items over the full year would be “materially higher” than it had previously anticipated.
And it is all down to the vegan variation on its flagship product.
Greggs Plc has largely prospered since Britain voted to leave the European Union almost three years ago. It issued a profit warning in May 2018, but has traded well since.
While the broader retail sector is suffering from cautious consumers reining in spending – particularly on expensive products – Greggs is in the sweet spot of offering affordable items that Brits actually want.
While they may be reluctant to order a new sofa, they are comfortable with spending 2 pounds ($2.59) on breakfast or 3 pounds on lunch.
The same mindset has also helped Associated British Foods Plc’s Primark, J D Wetherspoon Plc and the U.K. arms of the German no-frills supermarkets Aldi and Lidl.
On Monday Card Factory Plc, the seller of cheap greetings cards, said fund manager Neil Woodford had doubled his stake in the group to 10 percent. The chain hasn’t benefited from Brexit Britain as much as Greggs. In fact, it has been on a rollercoaster ride, and warned on profits last year.
That underlines that winning isn’t just about being cheap: it is about being both cheap and good. And that’s where the vegan sausage roll comes in.
Veganism is at the forefront of consumer tastes. Food giants and private equity funds are clamoring to get into the health and wellness trend, pursuing everything from natural skincare to vegetarian butchers.
In January, Greggs introduced the new plant-based pastry. It has proved so popular, the chain couldn’t keep up with the demand. Making the product available in all shops has helped sales to continue to grow strongly after an “exceptional” start to the year, the company said. But traditional pork sausage rolls have also been doing well, suggesting that the chain hasn’t lost touch with its traditional customers, nor its allure for those more interested in other categories.
So, like Brexit-backing Nigel Farage, the Greggs sausage roll is enjoying a surge in popularity. But so are shares in its seller.
They were up as much as 16 percent in early trading, which means they have almost doubled over the past year, and have reached a record high. That’s not bad for a humble pastry.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.
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