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BREAD AND PRICES KEEP BAKERIES HOT

Aggressive pricing and the ever-growing trend toward healthy eating helped fuel healthy sales in some in-store bakeries for the first half of this year, according to a sampling of bakery executives polled by SN.While many feared a dip in sales because of the new government-mandated nutrition labels, which went into effect May 8, sales do not appear to be affected, at least at this point.Indeed, the

Aggressive pricing and the ever-growing trend toward healthy eating helped fuel healthy sales in some in-store bakeries for the first half of this year, according to a sampling of bakery executives polled by SN.

While many feared a dip in sales because of the new government-mandated nutrition labels, which went into effect May 8, sales do not appear to be affected, at least at this point.

Indeed, the labels, which spell out the nutritional content -- including fat and calories -- of almost every packaged item, are already helping bread sales.

"Customers are simply more health-conscious than ever, and they're looking at bread as a nutritional item," said Anthony Mondello, director of bakery, King Kullen Grocery Co., Westbury, N.Y. "Of course, the new product labels are only helping bread sales, since the nutritional value is all the more evident. Everyone is reading product labels and taking nutritional value into account."

Here is what retailers told SN about the first half:

Tim Ulschmid

bakery director

Fairway Foods Minneapolis

We're very pleased with our bakery sales, which are up about 30% over last year.

I'd say that aggressive pricing -- on both the wholesale and the retail level -- accounts for two-thirds of the growth, and the introduction of our first line of par-baked breads accounting for the remaining one-third.

As for the aggressive pricing, we've reduced the number of items we push at discounted prices to our retailers and offered larger discounts on the ones that remain. In many cases, we've doubled the discount we traditionally gave.

For example, we offered a $5 discount on a case of our apple pies, instead of $1.50 to $2, and we offered a $2.50 discount on a case of our French bread, instead of $1.

We've been offering three to five heavily discounted items a month, so our retailers can feature an item regularly.

Some of our larger supermarket retailers have also been offering price incentives. They've been running hotter ads and promoting them with more advertising space.

Don Symonds

manager, bakery, deli purchasing

Spartan Stores Grand Rapids, Mich.

Our bakery sales are up about 18% this year, and I think the main reason is the strategy we followed at our March food show.

In the past, we've displayed a handful of items and placed a decent discount on them. This year, we displayed about 85% of our items and tied the discounts into the volumes purchased. In other words, the more product a retailer bought, the greater his discount.

Tim Kean

deli, bakery, seafood merchandiser

Pay Less Super Markets Anderson, Ind.

We've seen an increase in sales during the first half of this year as compared to the first half of 1993.

We started holding monthly meetings for our department managers in January. I think they have a lot to do with increased sales. The meetings allow our managers to exchange success stories in a timely, effective format, which allows everyone to take advantage of profitable ideas.

We also started emphasizing the importance of each person focusing on his own job, rather than getting too involved in the job duties held by others. All of these changes have allowed us to create a better orchestrated and sharper department. As a result, I think our bakery customers are buying more product per visit.

Anthony Mondello

director of bakery

King Kullen Grocery Co. Westbury, N.Y.

Our bread category is really growing. We've seen a 5% increase in sales during the past six months, and we expect the trend to continue throughout the year.

Customers are simply more health-conscious than ever, and they're looking at bread as a nutritional item. Of course, the new product labels are only helping bread sales, since the nutritional value is all the more evident. Bread is definitely a very good category for us right now. We've increased category shelf space by about 10% since January.

Special-occasion cakes are also selling extremely well for us right now. We've seen a sales increase of about 5% over last year.

Michele Murphy

assistant bakery manager

West Point Market Akron, Ohio

Bread sales have grown tremendously during the past half-year, because of a line of freshly made specialty breads we introduced around that time. The breads, which we sell under the label of The West Point Bread Co., are selling at a rate of about 130 loaves a day -- and they haven't cannibalized our other bread sales. As for the new nutritional labeling regulations, the transition went a lot smoother than we expected. In addition, I don't think they're affecting sales.

Russell Kates

chief financial officer

Steele's Markets Fort Collins, Colo.

Our sales are up about 5% over last year, and I think it's partly because the healthy craze is starting to wane. Customers are returning to more traditional bakery products.

I think it's because the customers looking for low-fat, no-fat and otherwise healthy bakery products are returning to the traditional sweets, because they're finding the taste isn't always there in the healthier versions.

As for the nutritional information now required on product labels, I think that people are definitely reading them.

I've seen people put items back on the shelf after reading labels, and I've seen others buy products they used to pass up after reading labels -- so I guess the overall sales effect is a wash.