Scientists believe lust has a lifespan of only two years, so thank goodness we are in the bakery business, where my best-selling lines of 20 years ago are still my top sellers today. (On a personal note, I am sure my lust lasted longer than two years, but I cannot speak on behalf of my wife Barbara!)
But moving swiftly back to bakery... January this year was particularly slow. January 2005 saw us grow sales by 15%, year on year. This year sales were up only 2% and that does not really cover our increased costs – electricity alone has gone up by 87% compared to the previous three-year contract.
Add to that petrol and wage increases, as well as government red tape, and we will be back to bread and water soon. May I take this opportunity to point out that we are not proud, will readily accept charity and will not be offended should you offer any donations!
So what are we doing about the slowdown? Here we go again, looking at cutting costs.
Why do we need all the ovens and decks switched on in the early part of the week? We are baking less so we should look hard at using less oven space. Fan extractors are very powerful, so we often have the crazy situation of a fan extracting heat while we are also heating the bakery. The solution is making sure the fan is switched off as quickly as possible.
Now I know you will be thinking, why waste our time with such trivia? It’s common sense. But this is so often the problem – we know what is wrong in the bakery and know the answer, but we do not act. The bigger you are, the more you tend to let the simple things slip by because there are more pressing problems to attend to.
Reducing prices is something we very rarely do at this time of the year – or any other time come to that – for the simple reason that there are fewer customers out there, so why sell at a lower price and make less profit? Increased volume of sales would never remotely compensate for the loss of margins, so why be a busy fool, working twice as hard for the same profit or even less?
Pricing is such a difficult thing to get right. In fact, I think it is an art rather than a science. No matter what we say, the area we trade in plays an enormous part in our pricing structure.
Not long ago, I had a telephone call from a very successful baker in the north and we were discussing our problems. When he told me the prices his competitors were selling at, all I could think was ‘Hell, he must be good to survive against those crazy low prices’.
The bakers around him must be living in the past – a little like an elderly lady I know who always wears a black garter in memory of those that have passed away. Why do so many bakers undervalue their own labour and products when the supermarkets do not sell baked goods that cheaply?
There is an old saying: ‘The easiest way to become poor is to pretend you are rich.’ I could add to that ‘or by undervaluing your products’. There may be no disgrace in being poor, but it is most inconvenient!