More than half of foodservice and retail businesses have reported a drop in sales of fresh sweet baked goods in the last year, new research has revealed.
Around 250 UK businesses, including bakeries, convenience stores, higher education caterers, pubs, and coffee shops, were surveyed by Sapio Research on behalf of European sweet treats supplier Baker & Baker. Findings were then published in the third edition of the Bakery Bites report series, entitled ‘The cost-of-living crisis and the sweet bakery category’.
Nearly half (45%) of the businesses surveyed reported a slight decline in sweet bakery sales while 10% had experienced a significant decline. Sixty percent also noted a decrease in average spend per customer compared to the previous year, while 86% saw an increase in the number of customers switching products.
Premium bakery lines are among those to be swapped out by shoppers as 63% of businesses surveyed said they have seen a decrease in sales of premium products, while 73% believed that people are buying more value and standard lines instead.
Businesses were also battling rising bills and inflation. When asked ’what price increases have had the biggest impact on the bottom line’, respondents highlighted rising ingredients costs as the biggest pain point, noted by 74% of respondents, followed by utilities, highlighted by 69%, and facilities such as rent and mortgage payments (40%).
“These are certainly unprecedented times,” commented Helen Sinclair, UK marketing manager at Baker & Baker. “And it looks like we’re in for a bit more pain before things start to improve.
“When we posed the question ‘when will the cost-of-living crisis end and things return to some sort of normality?’, more than half (54%) expect things to improve by the end of the year, and nearly a third of businesses (29%) are either unsure or think it will be later than summer 2024 before we start to see light at the end of the tunnel,” she added.
Independent analysis by Sapio Research is also included in the report, alongside tips on how businesses can remain competitive during these times, such as making sure products look the part, utilising multi-product baking, and leveraging different formats.
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