It said that like-for-like sales in the three weeks to December 30, 2006 rose by 3.3 per cent.

A trading update from the retailer, which specialises in doughnuts, pies and sausage rolls but recently introduced a new range of low-fat wraps and sandwiches, came as a report indicated Britons were spending record amounts on premium-quality food and drink.

According to the Datamonitor report, Britons spend an average of £56 each a year on gourmet or organic products.

British consumers spent a total of £3.6 billion on fine foods last year, placing the UK second only to France in the European speciality food and drinks market. The figure is expected to rise to £4.2 billion by 2011.

Greggs, which has more than 1,300 shops in the UK under the Greggs and Bakers Oven brands, introduced its Healthier Options range last year after it admitted it was suffering from a shift in consumer tastes towards healthier food.

It said in November that consumer reaction to the launch had been encouraging and new products would be rolled out early this year. However, it declined to comment on the range today.

Greggs said this morning that like-for-like sales increased 0.9 per cent in the second half, while like-for-like sales in the first week of 2007 showed a similar increase to those over the Christmas period.

The retailer, which serves about four million customers a week, said it opened 48 new shops and closed 31 during 2006. This includes the 14 Bakers Oven shops it closed in the north of England and Scotland due to poor sales.

Michael Darrington, the group managing director, said today: "I am pleased to confirm that the more positive sales trend noted in our last trading update on December 18 continued to the end of the year, in line with our expectations."

Matthew Adams, the author of the Datamonitor report, said: "One of the most important drivers has been the 'democratisation of luxury', with consumers of all income groups purchasing whichever premium products they can afford."

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