AUDIO: FOB conference gives verdict on supermarket bakery

Federation of Bakers
L-R Black, Garner, Peck and Gordon Polson, director of the Federation of Bakers sit a Q&A panel
  (Photo:  )

The bread and bakery industry's "pint is half full" according to speakers at the Federation of Bakers’ (FOB) annual conference. 

Speakers gave the supermarkets a going-over, though the bread industry came out somewhat positively, particularly in comparison to the world of sugar and fizzy drinks.

Ed Garner, director of Kantar Worldpanel, told delegates: “Bog-standard loaves is where the price war is. You have a growth of artisan bakery and we are seeing a growth in premium brands in the discounters so don’t think the discounters are just driving down prices – they do have another agenda as well, which is working nicely for them. You will see better growth of the premium while the cheap stuff is in decline.”

"Mismanaged"

However, Clive Black, head of research at Shore Capital Stockbrokers, said the supermarkets “deserve everything they’ve got”. He said they no longer have to worry just about the discounters as shoppers are also looking to pound shops for cheaper goods, as well as eating out more, and the supermarkets are paying a heavy price for that.

“Shoppers didn’t want multi-buy promotions, they wanted single buys,” he told delegates. “These retailers deserve everything they’ve got because they mismanaged their businesses."

Garner gave harrowing evidence of the Big Four’s decreasing share, yet said supermarkets were not losing their shoppers, but that what they walk away with was decreasing. He said Lidl “over-indexes” on bread and the over-trade will increase with faster growth. “Particularly in Lidl - it is its fastest growth category.”

Meanwhile, he said Aldi “averages on bread – what you’d expect given its share of groceries”.

Economy outlook

Overall, the economy is perking up, said Black. “The UK is looking much better. The first quarter started slowly and a lot of businesses were holding back before the General Election, so we expect that to accelerate business. We expect customer expenditure to be quite strong and government expenditure to come back. Consumer growth going forward is good, but coming from a very distressed position.

“After the mother of all binges, you get the mother of all hangovers and we are still in that hangover.”

Gordon Polson, director of the Federation of Bakers, gave British Baker his thoughts following the conference. Listen to our podcast:

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