Blog: is Tesco euphoric over bakery deal?
Bronya Smolen asks, how do you solve a problem like the ISB?
A bakery offering has always been difficult for retailers. It has been earmarked as a number two destination for shoppers, but running a high quality bakery within a major supermarket involves time, money and skill.
Does Tesco have the solution? Yesterday the retailer revealed to British Baker that it had acquired Euphorium Bakery in its entirety - a bakery which has the expertise to train bakers and create products to be shipped in fresh to a concession. After investing in the Euphorium brand in 2012, taking ownership has likely been its plan all along, but time will tell whether this is a clever fix or just a necessary move.
Sure, Tesco now has the power to supply an in-store bakery offering from a central bakery of ready-trained bakers. But in reality, with one production unit in Weybridge, the retailer is limited to where it can introduce Euphorium concessions without opening a second site further north.
Julian Wild, food group director and corporate finance partner at Rollits in Hull, made a suggestion yesterday that retailers should look to supply the bakery offering from local bakeries - much like the model Waitrose operates. He says: “Why try to manufacture fresh products yourself when there are others with good facilities capable of doing it better?” Perhaps this is the fix that Tesco hasn’t quite grasped.
Had Dave Lewis been chief executive of the retailer when it first considered investing in the brand, then maybe it wouldn’t have got involved. But the bed has been made, and only time will tell if its investment meets the needs of the supermarket giant in this turbulent market.
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