Space and Placement: Keys to Unleashing Fresh Bread's Full Potential

The commercial power of bakery is awesome — and its category metrics are indeed impressive:

• # 1 Household Penetration
• # 2 Purchase Frequency
• # 3 Dollar Sales
• # 2 Profit Generator (#1 Center Store)

However, first and foremost bakery needs adequate space to generate full performance levels. In addition, there is another opportunity to unleash the potential of bakery:  the placement of fresh bread. Analysis demonstrates that when the bakery aisle is placed on the perimeter, overall category and segment performance improves, versus center store locations.

One reason why this is so is that fresh bread has an extremely high shopper-to-buyer conversion ratio -- at 79 percent, it is one of the highest in the store. The implication is that for fresh bread, exposure pays big dividends. So it should be no surprise that when the fresh bakery aisle is on the perimeter, it experiences a 52 percent increase in traffic over interior locations. One supermarket retailer, for example, which uses perimeter locations for fresh bread in some stores and center store in others, has found that perimeter locations generated 26 percent more average weekly segment sales than the center store sections did.

But, no matter where fresh bread is located in the store, the category can only realize its full potential by having the space it merits. According to Willard Bishop Superstudy, the category brings in around 7 percent of store sales and over 12 percent of true profit, but only gets about 4 percent of a store’s space.

Reallocating space from categories that have longer days of supply and less contribution to retailer performance will unleash fresh bread’s potential by:

• Increasing the portion of trips that include fresh bread products through greater exposure
• Enhancing in-stock conditions making it easier for shoppers to purchase

Being in-stock is important. Out-of-stocks can be costly. Over 10 percent of shoppers, a Bimbo Bakeries Shopper Intercepts study determined, will purchase no bread at all or go to another store if the item they’re looking for isn’t there.

There are plenty of candidates for space. Many retailers look at reallocating space from categories that current hold higher days of supply compared to fresh bread.

Fresh bread uses space efficiently. That’s why perimeter locations and more space for this category will reap rich rewards. Its sales-to-space index is 150, one of the highest in the store, and it true profit-to-space index is 168.  So space given to bread will be a good investment towards boosting overall store performance.

New locations and more space are major decisions, so it is important to make sure that decision-makers who are responsible for store layout have this information so they will understand the opportunity. They will thank you for it.

A Free Resource for Retailers

Learn how space and placement can take Fresh Bread performance to even greater heights by downloading Bakery is Powerful from Bimbo Bakeries. Use the form below to request your copy ...

Coming in Future Tips

Find out how to merchandise bread on the perimeter to boost the category’s sales and profit performance.