Grocers Aim to Attract Shoppers to Bakeries Despite Rising Prices

Recent reports by Circana, a market research firm, show double-digit price hikes in most perimeter bakery categories, leading to decreased sales volumes. However, some items, such as donuts and cookies, have bucked this trend, seeing volume gains despite price increases.

Donuts and cookies registered volume increases of 5.5% and 1.4%, respectively, despite price hikes of 16.7% and 10.5% for the 52 weeks ending September 10, 2023. Similarly, croissants, buns, and rolls experienced gains in unit sales—3.8% and 1.8%—with price increases of 11.3% and 14.5%. On the other hand, specialty desserts saw the largest price jump at 22.8%, but this was accompanied by a 5.7% decrease in sales.

Melissa Altobelli, principal of Circana’s bakery vertical, explained that while consumers are cutting back on non-essential spending, they still desire indulgence. The appeal of the perimeter bakery lies in the ability for shoppers to purchase single items like a donut, ensuring they consume the whole product despite its higher cost per volume.

Retailers are seeking ways to drive further growth by offering healthier options, including low-carb selections and unique sweet goods with bold flavors, Altobelli added. More shoppers are now looking for products that are not only delicious but also better for them and the planet. PCC Community Markets in Seattle, for instance, offers vegan and gluten-free varieties, organic choices, and products with whole grains and reduced refined sugars.

To engage shoppers and stay competitive, supermarkets are also using social media and in-store promotions to spotlight fresh bakery items. Retailers like PCC also strive to educate their staff to better connect with customers and provide them with expert-level insights on the products.

Despite higher prices, some supermarket chains, including SpartanNash, are experiencing increased demand for bakery items. SpartanNash’s senior vice president, Amy McClellan, highlighted the importance of offering a variety of products at compelling price points to meet consumers’ cravings and special occasion needs. Seasonal offerings, like fall-themed items, play a key role in driving impulse purchases.

Additionally, grocers are cross-merchandising bakery items in other areas of the store to spur more sales. For example, premium buns may be placed next to ground beef, and pies could be featured in produce sections.

Freshness remains paramount for consumers when it comes to bakery items, and operators must align production with shopping patterns to ensure products move quickly and efficiently. Altobelli noted that the in-store bakery remains a central hub for celebrations, and many shoppers are willing to splurge on occasion, even in tough economic times.