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.
By Lesley Foottit
3.4% rise in the bread market
On the rise: A 10.9% growth is expected to be made between now and 2018
The UK retail market for bread and bakery products grew by 3.4% in 2013 despite continued decline in bread consumption and volume sales.
Key Note forecasters, which produced this report, anticipate a growth of 10.9% between now and 2018 based on the strength of diversification in the market. Changing consumer interests mean a wealth of avenues for growth in the sector as trends progress. Growth is also facilitated by the ongoing effects of rising inflation on retail prices and the higher expense of speciality breads.
The report also revealed that white bread is still a significant contributor to overall sales as the nation’s favourite bread. Its popularity has been compounded by the success of combination loaves such as Hovis’ Best of Both loaf, which are included in the sector.
However, sales of brown and wholemeal loaves are less substantial though buoyed up slightly as people favour ‘healthier’ options. Both traditional bread sectors are under threat from the rising speciality breads market in the UK including a variety such as ciabatta, naan and rye. The mass availability of different types has encouraged the diversification of consumer interests as the popularity of rolls, bagels, doughnuts and crumpets is also on the up.
Demand for gluten-free breads and homemade sandwiches also contributed to 2013’s growth. The popularity of the latter has been driven by new product developments such as combination rolls, wraps and flatbreads as well as the already-popular bagels category.
Despite the advent of speciality breads and other bakery products, total bread consumption in the UK continues on a long-term downward trend. Volume sales of traditional loaves are declining at a faster rate than the alternative options are increasing.
“Bread is gradually becoming a less integral component of many Britons’ everyday diets,” stated the report. “New product developments in competing wheat-based markets, such as breakfast cereals and biscuits, as well as the popularity of low-carbohydrate diets are contributing to this trend. Consumers are instead choosing to consume speciality breads less regularly, with many consumers opting to do so at dinner, when such products can be used to make the meal more special.”
– See more at: http://www.bakeryinfo.co.uk/news/fullstory.php/aid/12836/Bread_market_to_grow_10.9_25_despite_overall_decline_.html?utm_source=newsletter_weekly&utm_medium=email&utm_campaign=Newsletter%2BWeekly%2BIssue%2B405#sthash.AJMhIefp.dpuf