Bread prices up as much as 13% as energy costs rise

24 February, 2006
Page 3 
Supermarket bread prices have risen by as much as 10p for an 800g loaf over the last month, as bakery suppliers head off increased energy costs.
The price rises affect bran-ded, own-label and in-store bakery products in all four of the major multiples. RHM bread bakeries has phased in price rises on Hovis of around 6p a loaf. For example, Hovis’s Best of Both thick bread 800g now costs 96p in the major multiples, up from 90p on January 23.Allied Bakeries has also raised prices on its Kingsmill brand. Kingsmill Tasty Whole-meal medium sliced 800g loaves are priced at either 83p or 88p in the supermarkets, up from 78p at the end of January.The prices of own-label bread have also risen. For example, own-label stayfresh wholemeal medium 800g loaves are up from 50p to 57p in the major mul-tiples over the month. And price rises have even been phased in on economy bread. Budget white sliced bread 800g loaves are now 28p across the multiples, up from 25p at the end of January.Tesco senior bakery buyer Andrew Brocklehurst blamed “massive increases in various costs” – primarily energy costs – for recent price rises in Tesco’s bakery department. He said: “Pound for pound, bakery is the most expensive product you could have, with milling, baking and distribution costs. The biggest driver is energy. We know this from our 1,200 in-store bakeries. I hope we have reached agreements with suppliers and there will be no further price rises and, when the energy situation changes, we expect it to be reflected in price reductions.” Warburtons’ prices remain static in the major multiples, with a wholemeal medium 800g loaf priced at 91p. Analyst David Lang suggested the baker preferred to sell for under £1 a loaf while still building distribution nationwide. “It has a lot of capacity to fill and I don’t think it is in a screaming rush to breach the £1 barrier,” he said.Welsh bakery Brace’s prices remain steady, at around 76p for an 800g white loaf. Rathbones’ 800g loaves are priced at 69p.



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