Bakery department brings in the dough

The bakery category at grocery stores has gotten a lift now that in-store bakeries are fully open and people’s fears about buying single-serve items like bagels, cookies and bread have subsided.

In fact, the bakery segment as a whole — both in-aisle and perimeter baked goods — did very well over the last year. The latest NielsenIQ data show a hefty year-over-year gain of 14.7% in total bakery sales for the 52 weeks ended May 28, a sharp rise from the 3.3% increase a year earlier.

The International Dairy Deli Bakery Association (IDDBA) reported that bakery dollar sales climbed 8.7% to $3.8 billion in May, with items such as cookies, muffins and doughnuts turning in strong sales results. However, inflationary prices accounted for many of the increases, as total category units were actually down 3.4% in May versus a year earlier.

Baked goods found in the aisle or center-store area adjacent to the fresh bakery tallied dollar sales growth of 10.2% in May versus a year ago, though unit sales dipped about 1%. Perimeter bakery dollar sales were up 7.2% for the month.

Retailers have been pleased with the performance of fresh bakery single-serve items this year. Bagel sales, which sank 8.3% in 2021, rebounded by 18.5% to become one of the highest gainers in the category. Bagels were bested only by cookies and crackers, which saw sales surge 21.8% to $2.3 billion.

Some retailers are continuing to offer prepackaged bagels and rolls — a practice that amplified during the pandemic — and are seeing strong sales continue as consumers became used to grabbing them while in the department. For instance, Rastelli Market Fresh, with locations in Deptford and Marlton, N.J., has noticed upward sales in these items compared to pre-pandemic levels, according to Chris Mentzer, director of operations. Still, sales of single-serve items are rising as well, he added.

Cake and desserts were two bakery categories that didn’t take much of a hit in 2021, most likely due to people turning to indulgent treats during the pandemic. Shoppers’ interest in these categories has remained this past year. Where the two saw 6.9% and 8% increases a year ago, the growth trend continued with 13.6% and 12.4% increases year over year.

“We continue to see the sweet and savory snacking items have popular appeal, as well as the return to the familiarity of doughnuts, decadent desserts and chocolate,” said Maria Brous, director of communications for Lakeland, Fla.-based Publix Super Markets.

Shoppers embrace premium, fresh-made breads

Bread was fairly consistent with a modest 4.9% sales increase, about double the growth of the previous year. Rolls and buns performed better, coming in with a 12.3% increase, compared with 5.7% in the previous year.

Janell Schleeper, bakery category manager at St. Louis-based Schnuck Markets, with 112 stores in four Midwestern states, noted that its store have experienced strong sales in all bread segments in the bakery department, with artisan-style crusty and take-and-bake breads outpacing the overall category.

Publix’s Brous said the grocer has seen sales of fresh-baked bread boom this past year, as consumers appreciate “the delicious aroma” and “superior taste” of bread fresh from the oven each day.

Indeed, consumers are willing to pay more for premium bread, so high food prices aren’t impacting the category as much as some others in the supermarket, Jonna Parker, team leader for fresh at IRI, observed in a recent trends report from IDDBA.

“While there are cheaper sliced breads in the aisle,” Parker said, “people are not willing to give up the attributes of health and taste when it comes to just $1 or $2 more, even in this inflationary period.”