The Food Industry Association’s Power of In-Store Bakery report highlights what supermarkets across the U.S. have experienced over the last year — surging sales in the bakery department.
Whitney Atkins, vice president of marketing for the International Dairy Deli Bakery Association (IDDBA), shared that bakery was on the upswing in 2023, with an increase in dollar sales, even though total unit sales remained on par with 2022.
“The top growing items came from both center store and perimeter aisle,” she said. “Standouts like bakery center store bread have seen a rise of more than $1 billion over the last three years, and that’s a trend that doesn’t appear to be slowing down.”
Over the 52 weeks that concluded in early December, perimeter bakery items reached $18.3 billion, while center store bakery items recorded $25.1 billion in sales. These are up considerably from pre-COVID numbers in 2019 of $13.9 billion and $18.6 billion, respectively.
One of the top reasons for this, according to Jonna Parker, principal of fresh foods at Circana, is that during times of inflation, consumers stick with comfort items, especially bread. And there are numerous ways to utilize a loaf of bread in different meal items.
“Center store bread is usually eaten as a meal accompaniment or as a snack,” she said. “Center store and perimeter aisle bread are cousins to each other not substitutes. These is a reason for both aisles to be here and to do well.”
Arthur Ackles, director of perishable foods at Dave’s Fresh Marketplace, an independent grocery chain throughout Rhode Island, said bakery continues to shine, with sales rebounding from COVID nicely.
“That’s especially true for our scratch bakery that continues to innovate comfort-inspired baked goods with high quality ingredients and fresh tastes,” he said. “Customers want a taste of something delicious — something that doesn’t leave a big cake or pie leftover.”
That indulgence has been a key contributor to the retailer’s improved sales in squares, brownies, and cookies, along with demi loaves and breakfast twists and muffins.
“Cultural roots and getting back to old-school comfort continues to buoy bakery forward, with reintroducing and reinventing sweet treats from years gone by,” Ackles said.
Diane Cleven, vice president of deli/CMS/sushi/bakery at The Fresh Market, a chain of grocery stores based in Greensboro, N.C., said expectations at the store for bakery performance this year are very high.
“We already have a strong guest following and expect that to continue in 2024,” she said. “Our store format allows us to present bakery in a very elevated way, and we back up that presentation with high quality and exclusive products.”
In the first week of 2024, the retailer has seen increasing traffic for smaller desserts such as cake slices and individual desserts.
“Guests still want to treat themselves, but they do not want to overindulge,” Clevin said, which is usual this time of year when New Year’s resolutions for a healthier lifestyle are still being adhered to.
Trending up
Bakery staples like donuts and croissants have seen big rises in dollar sales, Atkins said, and when these items sell well, historically, the bakery department sees overall strong numbers.
The Circana report noted that perimeter cakes are seeing a nearly 6% increase in sales since 2019, which was buoyed by changes in the bakery department during the pandemic.
“In the pre-pandemic world, bakery sheet cakes were bought on holidays and graduations, but now, post-pandemic shoppers are buying smaller beautifully decorated cakes for small, more frequent gatherings,” Parker said.
Jewel Hunt, group vice president fresh merchandising at Albertsons Companies, continues to see increases in fresh bread sales, something that has been on the upswing since 2021. She noted French bread, sourdough bread, and the store’s signature Artisan dinner breads of garlic, rosemary olive oil, and asiago cheese, are all popular with customers.
Atkins said that in the bakery segment, freshness still is a No. 1 priority for consumers, and many choose to round out their meals with bread rolls or dessert options, and that has helped the bakery department as well.
Hook them in
Impulse sales are a big factor when it comes to bakery items. In fact, 30% of shoppers revealed they make impulse buys to treat themselves and 29% purchase to reward others, according to the most recent Circana Omnibus Survey.
“The bakery department is robust with creative flavors and items that deepen baskets on impulse buys,” Parker said. “Shoppers want to see nice baked goods.”
Atkins said that appealing to impulses is a great way for supermarket bakeries to increase sales.
Ackles feels that sharing delicacies across social platforms will entice entertaining and experimenting with new flavor combinations, and that could lead to impulse buys when consumers see the items in-store.
“Seasonally highlight new items to try — keep it fresh and different to make it so there is always something new,” he said. “Give the feel of an old-world bakery, offering rustic and Artisanal breads, local grain breads, day breads, and healthier-for-you breads such as avocado breads.”
Marketing matters
When it comes to marketing, Dave’s Fresh Marketplace believes in the philosophy of “Taste it, enjoy it, don’t regret it.”
“Highlight scratch bakery features including high-quality ingredients that mom, and grandma, used,” Ackles said. “We showcase fresh baked options coming out of our ovens, into our packages, consistently driving home that fresh baked quality.”
For bakery items, Albertsons Companies combines digital online products and marketing with its in-store offerings to provide options for customers who like to shop in different ways.
“Digital and social media have been great assets that we use to highlight quality, freshness, and selection,” Hunt said.
Looking ahead, IDDBA expects another strong year in bakery as grocers continue to offer indulgent items and bread varieties that entices consumers and improves basket sales.
