I was reading recently that Tesco throw away 41% of all bakery products, I find that disgusting. They won’t be the only supermarket group that have this kind of waste in their bakery offering. I can’t understand as to why there is so much waste.
Is it because they are having to offer availability at all times, day and night and if they haven’t got bread for customers when they want it will they go to a competitor? I think its too high a price to pay if that is the case. I know that certain supermarkets have very sophisticated ordering systems and even have bakery staff seconded into their head offices to help plan their requirements and stock, they have weather forecasts they buy to keep abreast of demand also,and still they have a mountain of waste.
So the big question is if they are the throwing away so much food why are the bread prices at rock bottom? Well in my opinion its because they see bakery items as a method of enticing customers into their stores for a low cost item, when they really don’t care about the bakeries that are having to produce these products for next to nothing. The supermarkets retail engineer all their prices so that what they throw away in bread , doesn’t matter as they make their money from customers on an average basket sale. The investments that bakeries are making just to keep up with the so called demand has forced prices down. There are too many bakeries fighting for sales and the prices are being governed by the supermarkets who are throwing away nearly half of it so that they can keep their volumes higher but pay less for it in the first place. It doesn’t matter to the supermarkets as they then go back to the bakers and tell them that that are not making much profit as they are having to throw lots away. Given that supermarket buyers in general are asking for ridiculous high margins to start with in the first place. The baker once inside this vicious circle has to come up with a lower price to keep the volume or in some cases the business in total as he needs to keep the volume to run the expensive machinery they have heavily invested in to supply the supermarkets, all in all a vicious circle. The best price is always the first price a baker gets when he starts his business relationship with a supermarket group.