MAKING A FAST BAKE

NANCY GRIFFIN

It's early in the morning, and the commuter is running late, so there's no time to eat. But wait: she just did a high-speed turn into the supermarket parking lot, heading for the in-store bakery and a quick takeout breakfast.

The in-store bakery? For breakfast?

It's not as far-fetched as it sounds. Some supermarkets are turning to breakfast as the next front in the battle over takeout with the fast-food emporiums -- and the weapon of choice is often turning out to be baked goods.

The trend is hottest on the West Coast, where coffee and a grab-and-go bakery item -- say a bagel or a scone -- is becoming more and more of a morning ritual.

Take Seattle, for instance, where coffee addiction has been elevated to a virtue, and where Queen Anne Thriftway is in the vanguard of this head-to-head breakfast contest.

The operator is running a program that sits at the extreme end of the supermarket spectrum -- a walk-up breakfast window. And the program has been successful there for nine years in a town dotted liberally with bakeries, specialty coffee shops and sidewalk wagons.

"It's on the side of the building in front of the loading zone with about 10 parking spaces available," said Mike Pedersen, assistant store director at Queen Anne. "We open at 5 a.m. and offer the usual Seattle variety of coffees, including espressos and lattes, as well as baked goods from 40 different specialty bakeries in the area.

"We have biscotti, scones, muffins, donuts, other pastries and, of course, bagels. We accept the money right there, outside."

"There's only one restaurant open for breakfast in a 15- or 20-block area, and that doesn't open until 9 a.m.," said Pedersen. "However, within two blocks of the store, there are at least a half-dozen espresso bars. Only two blocks away, there's an intersection with a Starbucks coffee shop and a bagel shop on one side. Across the street from them is another bagel shop and another coffee shop. There are a half-dozen new stands right in the area, too."

All of which adds up to competition for the morning business that is keen, if not cutthroat.

"This is a professional town. Everyone's on their way to work early in the morning. And it's also very much a latte-and-bagel-on-the-way-to-work crowd," Pedersen said. "We try to open earlier than the others. We put out lots of scones at $1.50 each and we sell out every day."

The window functions as a separate department with its own manager, Pat Nolan, who Pedersen calls "the unofficial mayor" of Queen Anne.

"It's not a big percentage of the store volume, maybe 1.5 to 2 percent, but this store does an unusually high volume for its small size of 10,000 square feet" said Pedersen.

"The vast majority of the breakfast customers also come in on the way home from work. We have a very loyal customer base."

Forty-five miles away, in Tacoma, Wash., another Queen Anne Thriftway is also chasing after the breakfast business aggressively. That store is newer and larger, but sports no walk-up window.

"We roast our own coffee and our coffee is fresher than anyone's," said Carl LaForce, store director. "We get beans from all over the world and roast about 20 different blends here. It's never more than three days old."

LaForce's store also does a huge pastry business, with all the pastries brought in from Seattle's many bakeries, he said. "We offer them things they can't get anywhere else in town." He added that none of the pastries are baked in the store.

All told, the bakery accounts for 8 percent of store volume, he added.

On weekends, LaForce aims specials at the customers who want to eat a larger breakfast at home, but who still don't want to cook it.

"They buy two or three hours later in the morning, and buy a larger amount," he said. "We sell a lot of fresh fruit and vegetable juices, tarts, containers of chopped fruit and 'estate tea' from a specialty tea broker in Seattle.

"Saturdays and Sundays we offer hot cinnamon rolls, sausage rolls, four kinds of quiche that we make," said LaForce. "This year, we had a bumper berry crop in the region, so we had berries with Devonshire cream and rum. That's how we get the customers in -- quality food and an electric reader board out front.

Pedersen, meanwhile, said weekend traffic is unusual in Seattle in that it does not seem to slow down. "This is one of the few towns where the locals go to tourist attractions. Everybody's out walking around everywhere. They buy coffee on the way to church and on the way back, even the kids."

West Linn, Ore., is not quite the same espresso center as Seattle, so when Starbucks opened near West Linn Thriftway, "it cut my espresso business in half," said John Smolders, director of bakery operations. However, special promotions brought the espresso business, which is only five years old now, back up to three-quarters of its original volume.

"We get our share of people on their way to work," said Smolders. "We have our own cash register in the bakery. We're right in the front of the store and we open at 6 a.m."

In Fort Collins, Colo., 60 miles south of Denver, Steele's Markets is competing on a different level with the fast-food breakfast purveyors. Seven days a week, each of its stores tries to snag early-morning customers with two eggs, two sausage links and two pieces of toast to go for $1.99, said Barb Harner, bakery director.

"The price hasn't changed in two years," said Harner. "We open at 5 a.m. and have our own grill cooks in all stores." A central bakery facility sends pastries to all stores.

"We're competing with McDonald's, but with homemade quality. It's brought us a lot of repeat business. We see a lot of our breakfast customers later, doing their food shopping with the family."

The four stores and bakery-outlet store are all just four miles apart, but the demographics run the gamut. They include a blue-collar neighborhood, a high-income area, a college town, a farm community and a retirement area.

Given this diversity, an item may do better in one store than another, but bakery managers try to choose items that will appeal to all. One store in a downtown location has a walk-up window, as a convenience to hurried city shoppers.

"We have a cinnamon-roll special and we run it different days in different stores," Harner said. The breakfasts and other specials have added at least 5 percent each to the total deli sales, and deli supplies 10 percent of store sales, said Harner.

"In the store in the business district, we see people lined up 20 and 30 deep," she added. "That store is only 25,000 square feet and on the bakery side, it averages $60 in sales per man-hour."

Bagels are booming at Steele's, where the department bakes 12 varieties of 4-ounce bagels and retails them for 39 cents each, or at four for a dollar as an occasional special.

"They're nearly 85 percent gross profit -- our biggest day, we sold 109 dozen," Harner said. "The bakery has changed strategies a couple of times [in Harner's 13-year tenure] but the deli-bakery combo has increased business 20 percent."

Bagels are new at Dorothy Lane Markets in Dayton, Ohio, but the bagel-makers are already turning out 13 varieties of 4-ounce bagels for the breakfast trade, at a price of three for 99 cents when prepackaged.

"It only costs us 42 cents for the whole bag," said Scott Fox, director of bakery operations for the independent's two stores. "We're very happy." Since the operator stopped buying from a local bakery and starting making its own bagels, consistency has improved and bin sales have doubled.

To advertise the program, Dorothy Lane Markets sends flyers to the members of its frequent-shopper club, who receive various special discounts depending on their spending level.

"This enables us to track our best customers and that's where we put our advertising dollars -- back into our best customers, not newspaper ads," Fox explained.

Smolders at West Lynn Thriftway said the bagel craze has cooled down there, so the store has stopped making its own.

"We buy bagels from a wholesale baker in town and heat them in the oven. We don't have to hang onto the in-store bakery mentality of low prices being everything," explained Smolders. "We put out a quality product; we just get the product from different sources," he said. "We do about 50 percent scratch, 40 percent mix and 10 percent par-baked, frozen or ready-baked."

In the older of the two Dorothy Lane stores, customers can buy coffee on the honor system from 5 a.m. to 11 a.m. They can get their own coffee, drop the money in a basket and go. The bakery is at the front of the store for their convenience.

A cafe at the other store offers a full-service breakfast starting at 6 a.m. The departments have bakeries in both stores, but don't duplicate items. A van regularly delivers items between the two stores, which are located less than four miles apart.

The trend toward really innovative breakfast specials apparently has not yet swept the northeastern United States.

Marvin Spira, executive director of the Eastern Dairy, Deli and Baker Association, says real estate is the big limiting factor.

"We're behind the West Coast and the Midwest because of real- estate pressures -- stores are smaller and volume of shoppers is higher relative to the space -- so the concentration here's been on get-'em-in and get-'em-out fast," said Spira. The eastern region (New York, New Jersey, Connecticut and Pennsylvania) accounts for $20 billion of the country's $60 billion supermarket-bakery business. "But it's another area where we in the supermarket business are competing with fast-food restaurants."

Supermarkets do better with the evening meal because it's not eaten in the car, said Spira. Consumers don't mind spending a little longer in the store because they're going home to heat up the food they purchased.

"Right now the fast-food places are winning hands down. Last year was the first year Americans consumed more meals out of the home than at home. Early breakfast and lunch are no longer a ritual in the home," said Spira.

"Supermarkets can offer the same food, the same wonderful coffee, but we're not going out and attracting customers because we have a problem. Right now they'd have to stand in line to get out," he said.

"We have ambivalence about getting them out in a hurry because we want them to shop a little, while they're in there. But there are solutions. Let them pay at the food-service counter, but have a special aisle for breakfast checkout if they also shop a little.

"We're also not training the consumers," Spira added. "We need a lot of PR to say 'Try us once.' "