This month has seen a fall yet again in the price of sliced bread. We are all under pressure now running our bakery businesses to compete with the undermining of sliced bread prices. Tesco who have been under the cosh have reacted to Aldi and Lidl’s lower prices on bakery products and reduced the Hovis to 78p. This week Morrisons have Hovis at 75p. I can’t understand why Hovis are putting these deals out there for the supermarkets and I honestly don’t think that they are making any money , once you have factored in credit terms, logistics and general costs like sales teams negotiating the deal in the first place and then there is the technical side of all this. There is also some account manager who has an ongoing dialogue daily to make sure that deliveries have been made correctly and there are no issues.
I understand that the bakeries need to push volume through their plants, but aren’t they being just “busy fools”?
The cost of maintenance on their plants and the new investment in machinery will take it’s toll. It’s just like running your car 24 hours a day, parts wear and servicing is needed more often, they all add big costs to a manufacturer.
The plain and simple problem is that there are too many retailers out there selling bread and knocking each other out to attract customers into their stores. They can afford to sell it cheaply as they can make margins on the other thousands of lines they sell. I blame the retailers myself , they are not selling anymore and our industry is getting put under immense pressure.
The bakers union this week have suggested a minimum wage of £10 per hour, which is fair enough, but where is the extra money coming from? It won’t be the likes of the major multiples as they only want their bread cheaper and cheaper. Something will have to give and it unfortunately will probably one of the major bakery brands, or failing that a lot of redundancies.
Finally I accept that bread is a major part of our staple diet and that families have to be able to afford it, but you cannot run a major bakery operation, pay for TV adverts, marketing, investment and daily logistics so that Tesco can have their margin (which is the lions share of the price still) and the bread sell for 75p, the margin is too fine for the bakers.
It does seem ages since we were all celebrating Christmas and the New Year and wondering were we would be as a business in 2015. We have started as well as anyone could have expected so far given that The supermarkets have totally undervalued the value of the bakery sector. The supermarket retailers have to take full responsibility for the decline in the monetary value of bread as they are the ones who have decided that they are going to use a basic commodity like our daily bread as a driver to get people into their stores. Tesco as we know are in a mess and decided to sell Hovis for 78p,Bakers cannot dictate what they sell at by law so they have no say in it. This undervalues a bakers brand name that has took years of hard work to build up. Big question is though ” will they sell more bread in total”? I don’t think so. The waste i have been informed is very high and it is a disgrace that they do this when there are so many people who are struggling to get by. If you eat 2 or 3 loaves a week as a family you won’t buy more because it’s cheaper. Maybe if Tesco were to reduce their already inflated margins on all their other thousands of lines they wouldn’t have to devalue bread. They still want their over inflated margins by the way from the bakers.
Hot Cross Buns
It’s hard to believe that in January we started selling Hot Cross Buns when Easter is 3 or 4 months away. The fact is consumers love them all year round. The sticky spicy taste is just the job for a hot toasted treat when you are snowed in like we have been for a few days. In the first 3 weeks we have already sold 42,000 pkts and we don’t even sell our Bakestone to supermarkets. All our sales are through a network of local independent shops.
Potato cakes are still selling well, even though the are more of a Northern speciality. I know that certain parts of this country don’t even know what they are. The name is interesting as well Potato cakes. It;s not really a cake is it? maybe that is why the younger generation don’t really know what they are. You still can’t beat them when they are toasted and with baked beans and eggs for breakfast, or is that just me?
We are progressing really well with a great team battling the snowy conditions up in the North, the same can be said for our Newcastle and Bradford sites. The managers working hard to ensure the deliveries are getting out there to our customers reliablly and on time given the conditions. Although as we all know a bit of snow and we seem to get gridlocked as the roads haven’t been gritted properly and you look in your rear view mirror and see the glitter stuck in the queue 3 cars being you! Still the new Hethertons-original is showing interest in the Carlisle area. We have sponsored Edenfm a community radio station and as a family business are trying to raise money via sales of our bread to give to a local charity or volunteer group. We only have a handful of customers buying the bread so it is early days yet, but the 5ps will add up if people like our bread and buy into the community idea.
We will be promoting our bread at Dalemain House in Penrith. They are celebrating 10 years at their Marmalade event. For more info you can visit their website http://www.dalemainmarmaladeawards.co.uk
We have the 4 Facebook sites , 4 Google+ sites and also 4 twitter accounts so you can see that it is keeping me busy. I have kept pretty active with these sites so that our web presence is always available to consumers to post their thoughts on.
We have invested heavily for us into IT. !0 new computers and switched all our software onto Microsoft 365 and that has improved communications throughout our business. We are more efficient now using iCloud for storing documents as well. We have been using online ordering for our customers but unfortunately that hasn’t really tok of as most like to have either a standing order or speak to someone. We like that and it helps keep the lines of communication going. You get to talk to people and see what sells for them and what doesn’t.
We have launched our brand new website (long overdue i might add) . I only realised that when I was going through a timeline that is on the front page that I have been working my own business in bakery since 1975. Now that is not extraordinary in some people’s eyes maybe, but as I have told loads of people I am only 39 years old is does cause a problem.
Anyway if you live in Manchester and want to have a look please do. There are some videos I have made myself that haven’t had too many views so that would be nice if they were watched..begging now. The website is http://www.quaysidebakery.co.uk
Some new product development is happening from us. I can’t share it with you yet, but please come back soon for more info. Have a great February everyone.