Progressive Grocer - June 2018 - 151

FRESH FOOD

2018 Retail Bakery Review

Proof of Life
THE BAKERY DEPARTMENT IS FACING
SOME TOUGH RE ALITIES THIS YE AR,
BUT E XPECTATIONS ARE HIGH. By Kat Martin
n the grocery store, the bakery has a unique position in
that the majority of its sales are from impulse purchases,
but one that's fairly easy to justify, as they're small treats.
Progressive Grocer 's 2018 Retail Bakery Review takes a
look at the state of the department nationwide.
Last year, sales were flying high, with nearly 70
percent of respondents reporting a sales increase from
the previous year. This year, the numbers are a bit more
grounded, with 55 percent reporting a sales increase of
an average 6.8 percent (compared with an 11.1 percent
increase last year). About one-third (30.2 percent) noted
that sales had stayed the same, up from the 21.7 percent
last year who indicated the same. For the nearly 10 percent who said
sales decreased this year, the sales decline was 5.5 percent on average.
Profits also are reportedly down. Only 44.7 percent indicated an increase in profits from last year, while in the 2017 survey, 52.2 percent saw
profits rise. This can be attributed to several factors, one of which is the

slight increase of shrink: This year, shrink
as a percentage of sales hit 8.3 percent,
up from 5.9 percent last year.
The percent of sales the department
contributes to overall store sales also
dropped a bit. The number had hovered
at slightly above 7 percent for the past
three years, but has now dipped down
to 6.4 percent. However, optimism
about future sales is higher than last
year, with 65 percent indicating that
they expect sales to increase for 2018
when compared with 2017; last year, it
was only 60.9 percent. The percentage
of the expected sales increase for 2018
also is higher than it was last year, with
respondents expecting sales to rise 8.3
percent this year, while the expected
growth last year was only 7.8 percent.

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