bake - April 2012 - 22

Jacksonville, FL, says her bakery emphasizes the value
Above: Inside The City Bakery, shoppers are enticed by a wide variety of delectable menu options.

says. “Prices tend to be more elastic and more a case of pricing it even higher, so as to create the aura of a specialty item.” Sweetish Hill raised prices last fall, but still not enough to offset higher ingredient costs in 2011. “We still need to up (prices) some more,” Murphy says. “Ingredient costs killed me last year. My food costs are up 4% — the highest they have ever been. It has really been the difference between what should have been a proﬁtable year and a year in which we barely broke even.”

of what customers receive for the price they pay. “We try to explain to customers that you are getting what you are paying for,” she says. “Do you want a lot of cake left at the end of your party, or do you want them all gone? It may cost more, but they will enjoy them a whole lot better.” Price elasticity One of the most important economic lessons that any retail baker can study is price elasticity of demand. inﬂuenced by changes in price.

Price elasticity measures how demand for a product is

ADVERTISEMENT

Lynn Schurman, owner of Cold Spring Bakery in Jim Murphy of Sweetish Hill Bakery in Austin, TX, starts with food cost as the foundation for determining his bakery cafe’s retail prices and When determining the retail price of any item, aim for a target price in which the food cost percentage falls in the range of 25% or less. then determines whether price increases are necessary. When determining the retail price of any item, Murphy aims for a target of 25% food cost or less. Beyond food cost, he believes in the importance of evaluating price elasticity on a category by category basis. “With deli, food cost is very important and prices tend to be very inelastic,” he says. “There are a lot of people making sandwiches out there and lunch needs to fall within a certain price range — usually $6 to $8.” Cakes are a different story. “Food cost is not necessarily a determining factor,” he
Maury Rubin (right) of The City Bakery advocates a personal approach to customer service.

Cold Spring, MN, says her bakery relies on computer software that ﬁgures the cost of ingredients, packaging and labor for its items. “We then use a ﬁxed amount for overhead and proﬁt,” she says. “We do average out items within a category, so that we have the same price, for example, for both blueberry and cherry sweet rolls.”

22 < APR 2012 | bakemag.com

http://www.bakemag.com

bake - April 2012

Table of Contents for the Digital Edition of bake - April 2012

bake - April 2012
Editorial - The pricing issue: Lessons from the City
Table of Contents
News Bites - Sprinkles Banks on Cupcake ATM
News Bites - Guild Offers Baking Series
News Bites - ADM Milling Names President
News Bites - Bruegger’s Lands in Pittsburgh
News Bites - DuPont Addresses Guar Shortage
News Bites - AIB Appoints Latin America Director
News Bites - Puratos Unveils New Website
Management - Employment Policies
Tax Tips - SIMPLE Retirement Planning
Labor Front - Staffing Shifts
Legislation - Compliance Advantages
Ingredients - Versatility of Honey
Price Puzzle
Maximum Management
Tiered Pricing
Choosing a Signature Item
Fabulous Flatbreads
Chain News
World-Class Distinction
Extreme Retail Cakes
Cost-Effective Production
Cafe - The French Connection
Products
Showcase
Classifieds
bake - April 2012 - bake - April 2012
bake - April 2012 - 2
bake - April 2012 - Editorial - The pricing issue: Lessons from the City
bake - April 2012 - 4
bake - April 2012 - Table of Contents
bake - April 2012 - News Bites - Bruegger’s Lands in Pittsburgh
bake - April 2012 - 7
bake - April 2012 - News Bites - Puratos Unveils New Website
bake - April 2012 - 9
bake - April 2012 - Management - Employment Policies
bake - April 2012 - 11
bake - April 2012 - Tax Tips - SIMPLE Retirement Planning
bake - April 2012 - Labor Front - Staffing Shifts
bake - April 2012 - 14
bake - April 2012 - 15
bake - April 2012 - Legislation - Compliance Advantages
bake - April 2012 - 17
bake - April 2012 - Ingredients - Versatility of Honey
bake - April 2012 - 19
bake - April 2012 - Price Puzzle
bake - April 2012 - 21
bake - April 2012 - 22
bake - April 2012 - 23
bake - April 2012 - 24
bake - April 2012 - 25
bake - April 2012 - 26
bake - April 2012 - Maximum Management
bake - April 2012 - 28
bake - April 2012 - 29
bake - April 2012 - 30
bake - April 2012 - Tiered Pricing
bake - April 2012 - 32
bake - April 2012 - 33
bake - April 2012 - Choosing a Signature Item
bake - April 2012 - 35
bake - April 2012 - 36
bake - April 2012 - 37
bake - April 2012 - Fabulous Flatbreads
bake - April 2012 - 39
bake - April 2012 - 40
bake - April 2012 - 41
bake - April 2012 - Chain News
bake - April 2012 - 43
bake - April 2012 - 44
bake - April 2012 - 45
bake - April 2012 - World-Class Distinction
bake - April 2012 - 47
bake - April 2012 - 48
bake - April 2012 - 49
bake - April 2012 - Extreme Retail Cakes
bake - April 2012 - 51
bake - April 2012 - 52
bake - April 2012 - 53
bake - April 2012 - Cost-Effective Production
bake - April 2012 - 55
bake - April 2012 - 56
bake - April 2012 - 57
bake - April 2012 - Cafe - The French Connection
bake - April 2012 - 59
bake - April 2012 - 60
bake - April 2012 - 61
bake - April 2012 - Products
bake - April 2012 - 63
bake - April 2012 - Showcase
bake - April 2012 - 65
bake - April 2012 - Classifieds
bake - April 2012 - 67
bake - April 2012 - 68
https://digital.bakemag.com/sosland/bake/bake-march-april-2024
https://digital.bakemag.com/sosland/bake/bake-january-february-2024
https://digital.bakemag.com/sosland/bake/bake-special-report-november-2023
https://www.nxtbook.com/sosland/bake/bake-november-december-2023
https://digital.bakemag.com/sosland/bake/bake-september-october-2023
https://digital.bakemag.com/sosland/bake/bake-july-august-2023
https://digital.bakemag.com/sosland/bake/bake-special-report-july-2023
https://digital.bakemag.com/sosland/bake/bake-redbook-2023
https://digital.bakemag.com/sosland/bake/bake-special-report-may-2023
https://digital.bakemag.com/sosland/bake/bake-may-june-2023
https://digital.bakemag.com/sosland/bake/bake-march-april-2023
https://digital.bakemag.com/sosland/bake/bake-special-report-january-2023
https://digital.bakemag.com/sosland/bake/bake-january-february-2023
https://digital.bakemag.com/sosland/bake/bake-november-december-2022
https://digital.bakemag.com/sosland/bake/bake-special-report-november-2022
https://digital.bakemag.com/sosland/bake/bake-september-october-2022
https://digital.bakemag.com/sosland/bake/bake-special-report-july-2022
https://digital.bakemag.com/sosland/bake/bake-july-aug-2022
https://digital.bakemag.com/sosland/bake/bake-redbook-2022
https://digital.bakemag.com/sosland/bake/bake-special-report-may-2022
https://digital.bakemag.com/sosland/bake/bake-may-june-2022
https://digital.bakemag.com/sosland/bake/bake-march-april-2022
https://digital.bakemag.com/sosland/bake/bake-january-february-2022
https://digital.bakemag.com/sosland/bake/bake-special-report-january-2022
https://digital.bakemag.com/sosland/bake/bake-november-december-2021
https://digital.bakemag.com/sosland/bake/bake-special-report-november-2021
https://digital.bakemag.com/sosland/bake/bake-september-october-2021
https://digital.bakemag.com/sosland/bake/bake-july-august-2021
https://digital.bakemag.com/sosland/bake/bake-redbook-2021
https://digital.bakemag.com/sosland/bake/bake-july-2021
https://digital.bakemag.com/sosland/bake/bake-may-june-2021
https://digital.bakemag.com/sosland/bake/bake-special-report-may-june-2021
https://digital.bakemag.com/sosland/bake/bake-march-april-2021
https://digital.bakemag.com/sosland/bake/bake-january-february-2021
https://digital.bakemag.com/sosland/bake/2021_01_01
https://digital.bakemag.com/sosland/bake/2020_12_01
https://digital.bakemag.com/sosland/bake/2020_11_01
https://digital.bakemag.com/sosland/bake/2020_09_01
https://digital.bakemag.com/sosland/bake/2020_08_01
https://digital.bakemag.com/sosland/bake/2020_07_02
https://digital.bakemag.com/sosland/bake/2020_07_01
https://digital.bakemag.com/sosland/bake/2020_06_01
https://digital.bakemag.com/sosland/bake/2020_05_01
https://digital.bakemag.com/sosland/bake/2020_04_01
https://digital.bakemag.com/sosland/bake/2020_02_01
https://digital.bakemag.com/sosland/bake/2020_01_01
https://digital.bakemag.com/sosland/bake/2019_12_01
https://digital.bakemag.com/sosland/bake/2019_11_01
https://digital.bakemag.com/sosland/bake/2019_10_01
https://digital.bakemag.com/sosland/bake/2019_09_01
https://digital.bakemag.com/sosland/bake/2019_08_01
https://digital.bakemag.com/sosland/bake/2019_07_01
https://digital.bakemag.com/sosland/bake/2019_06_01
https://digital.bakemag.com/sosland/bake/2019_05_01
https://digital.bakemag.com/sosland/bake/2019_04_01
http://digital.bakemag.com/sosland/bake/2018_07_02
https://digital.bakemag.com/sosland/bake/2019_03_01
https://digital.bakemag.com/sosland/bake/2019_02_01
https://digital.bakemag.com/sosland/bake/2019_01_01
http://digital.bakemag.com/sosland/bake/2018_12_01
http://digital.bakemag.com/sosland/bake/2018_11_01
http://digital.bakemag.com/sosland/bake/2018_10_01
http://digital.bakemag.com/sosland/bake/2018_09_01
http://digital.bakemag.com/sosland/bake/2018_08_01
http://digital.bakemag.com/sosland/bake/2018_07_01
http://digital.bakemag.com/sosland/bake/2018_06_01
http://digital.bakemag.com/sosland/bake/2018_05_01
http://digital.bakemag.com/sosland/bake/2018_04_01
http://digital.bakemag.com/sosland/bake/2018_03_01
http://digital.bakemag.com/sosland/bake/2018_02_01
http://digital.bakemag.com/sosland/bake/2018_01_01
http://digital.bakemag.com/sosland/bake/2017_12_01
http://digital.bakemag.com/sosland/bake/2017_11_01
http://digital.bakemag.com/sosland/bake/2017_10_01
http://digital.bakemag.com/sosland/bake/2017_09_01
http://digital.bakemag.com/sosland/bake/2017_08_01
http://digital.bakemag.com/sosland/bake/2017_07_01
http://digital.bakemag.com/sosland/bake/2017_06_01
http://digital.bakemag.com/sosland/bake/2017_05_01
http://digital.bakemag.com/sosland/bake/2017_04_01
http://digital.bakemag.com/sosland/bake/2017_03_01
http://digital.bakemag.com/sosland/bake/2017_02_01
http://digital.bakemag.com/sosland/bake/2017_01_01
http://digital.bakemag.com/sosland/bake/2016_12_01
http://digital.bakemag.com/sosland/bake/2016_11_01
http://digital.bakemag.com/sosland/bake/2016_10_01
http://digital.bakemag.com/sosland/bake/2016_09_01
http://digital.bakemag.com/sosland/bake/2016_08_01
http://digital.bakemag.com/sosland/bake/2016_07_01
http://digital.bakemag.com/sosland/bake/2016_06_01
http://digital.bakemag.com/sosland/bake/2016_05_01
http://digital.bakemag.com/sosland/bake/2016_04_01
http://digital.bakemag.com/sosland/bake/2016_03_01
http://digital.bakemag.com/sosland/bake/2016_02_01
http://digital.bakemag.com/sosland/bake/2016_01_01
http://digital.bakemag.com/sosland/bake/2015_12_01
http://digital.bakemag.com/sosland/bake/2015_10_01
http://digital.bakemag.com/sosland/bake/2015_09_01
http://digital.bakemag.com/sosland/bake/2015_08_01
http://digital.bakemag.com/sosland/bake/2015_07_01
http://digital.bakemag.com/sosland/bake/2015_06_01
http://digital.bakemag.com/sosland/bake/2015_05_01
https://www.nxtbook.com/sosland/bake/2015_04_01
http://digital.bakemag.com/sosland/bake/2015_03_01
https://www.nxtbook.com/sosland/bake/2015_02_01
https://www.nxtbook.com/sosland/bake/2015_01_01
https://www.nxtbook.com/sosland/bake/2014_12_01
https://www.nxtbook.com/sosland/bake/2014_10_01
https://www.nxtbook.com/sosland/bake/2014_09_01
https://www.nxtbook.com/sosland/bake/2014_08_01
https://www.nxtbook.com/sosland/bake/2014_07_01
https://www.nxtbook.com/sosland/bake/2014_06_01
https://www.nxtbook.com/sosland/bake/2014_05_01
https://www.nxtbook.com/sosland/bake/2014_04_01
https://www.nxtbook.com/sosland/bake/2014_03_01
https://www.nxtbook.com/sosland/bake/2014_02_01
https://www.nxtbook.com/sosland/bake/2014_01_01
https://www.nxtbook.com/sosland/bake/2013_11_01
https://www.nxtbook.com/sosland/bake/2013_11_02
https://www.nxtbook.com/sosland/bake/2013_10_01
https://www.nxtbook.com/sosland/bake/2013_09_01
https://www.nxtbook.com/sosland/bake/2013_08_01
https://www.nxtbook.com/sosland/bake/2013_07_01
http://digital.bakemag.com/sosland/bake/2013_06_01
https://www.nxtbook.com/sosland/bake/2013_05_01
https://www.nxtbook.com/sosland/bake/2013_04_01
https://www.nxtbook.com/sosland/bake/2013_03_01
https://www.nxtbook.com/sosland/bake/2013_02_01
https://www.nxtbook.com/sosland/bake/2013_01_01
https://www.nxtbook.com/sosland/bake/2012_11_01
https://www.nxtbook.com/sosland/bake/2012_10_01
https://www.nxtbook.com/sosland/bake/2012_09_01
https://www.nxtbook.com/sosland/bake/2012_08_01
https://www.nxtbook.com/sosland/bake/2012_07_01
https://www.nxtbook.com/sosland/bake/2012_06_01
https://www.nxtbook.com/sosland/bake/2012_05_01
https://www.nxtbook.com/sosland/bake/2012_04_01
https://www.nxtbook.com/sosland/bake/2012_03_01
https://www.nxtbook.com/sosland/bake/2012_02_01
https://www.nxtbook.com/sosland/bake/2012_01_01
https://www.nxtbookmedia.com