Greggs sales soar thanks to coffee and healthy sandwiches

Shares in bakery retailer rise more than 10pc on back on trading update as it reduces reliance on sausage rolls

Greggs, the bakery chain, appears to be reducing its reliance on sausage rolls and pastries after reporting a sharp increase in sales thanks to coffee and a new range of low-fat sandwiches.

Greggs, which was the victim of a glitch on Google last month that saw its logo changed, is enjoying healthy sales after revamping its stores to fightback against the growing popularity of coffee shops in the UK.

The Newcastle-based retailer has installed seating into stores, improved its coffee blend, and introduced new healthy sandwiches to attract customers.

This strategy appears to be working, with like-for-like sales growing 5.4pc in the 11 weeks to September 13.

This increase compares to a 1pc fall in the same period last year, as Greggs struggled in the face of fierce competition from coffee shops and convenience stores offering sandwich ranges and salads.

As a results of the sales growth, Greggs said that profits for the year will now be "materially ahead of our previous expectation".

Roger Whiteside, chief executive, said: "This strong performance reflects a positive response from customers to new product initiatives, improved service, better value and our investment in shop refurbishments alongside more favourable trading conditions.

"In particular our new sandwich range with increas ed focus on our balanced choice options has been selling well. Upgrades to our coffee blend and to some of our core sweet lines have also driven increased sales."

Greggs has introduced 15 new low-calorie sandwiches, such as cajun chicken in flatbread, which are accounting for £1m of sales a week.

However, although Greggs has introduced new products, its sausage rolls and pasties - which are cooked within stores - still account for roughly a third of sales. Greggs generates £100m a year from sausage roll sales.

Clive Black, analyst at Shore Capital, said: "From our own visits we have seen consistently better store standards from Greggs, a steady improvement in the ranges and stores more proactively selling product."

Shares in Greggs rose by 62.50, or 12pc, to 598.50p in afternoon trading.