Plant bread sales across Asda’s 525 stores had declined to 5M loaves a week, despite the retailer investing more than £30M in the reformulation of its core products, as well as refreshing its bread aisles.
“Bread is really big for Asda,” Peck told a Federation of Bakers’ annual conference at the Royal Armouries in Leeds last month (June). “It’s 45% of our bakery turnover and it’s imperative that we try to protect our volume.” Asda’s average price for bread was now 90p a loaf and the retailer’s Smart Price loaf was just 40p, she claimed.
Bread hit by price reductions
“Bread is the hardest hit when it comes to price reductions. It’s important to get customers back, but it is [price cuts and fewer customers] costing half a million pounds a week in my sales,” she said.
Although Asda’s bread sales were falling, it had tried to stem the decline by reformulating products to make them cheaper, without affecting taste, added Peck.
The UK’s plant bread sales had continued to decline for the past 40 years, Peck claimed. As a result, it was important to look at areas of growth and at bread alternatives, such as thins and wraps.
Sales of plant bread fell by 4.5% to £1.6bn last year, said Kantar Worldpanel director Chris Longbottom. Bread roll sales declined by 0.5% to £256M over the same period. In contrast, sales of sandwich alternatives rose by 16% to £403M, with around 6.5M UK consumers purchasing them in 2014, compared with 2.5M in 2013, he added.
Investment
Allied Bakeries, which has recently come to the end of a £210M investment programme across its UK sites, pumped £8.4M into its new Kingsmill Sandwich Thins product line in Glasgow last year. The investment, which created 27 new jobs, was part of Allied Bakeries’ plans to counter the decline in plant bread sales.
Matt Watkins, Allied Bakeries’ strategic insight manager, said: “Plant bread is expected to decline by 7.4% within the next three years.
“Within that time, we will grow to sell close to 88M sandwich thins, which is more than double the 40.6M sold since 2014.”