Despite a dip in units, the bakery department generated strong sales growth in June, with solid numbers from both the fresh and aisle bakery segments.
Overall bakery category sales came in at $3.1 billion for June, up 9.3% year over year in dollars and down 3.4% in unit volume, the International Dairy Deli Bakery Association (IDDBA) reported in its June marketplace update, based on IRI Total U.S. Integrated Fresh data from the multi-outlet retail channel.
Aisle bakery goods tallied double-digit growth in dollar sales, up 11.7%, while fresh bakery gained 6.1% in dollars. On a pound-weight basis, bakery department volume declined 2%, reflecting decreases of 3% in the fresh bakery and 1.5% in the aisle bakery segments.
“Both the fresh perimeter and aisle bakery delivered growth in June, though much like many other areas of the store, all growth came from inflation. Units were down 2% for bakery overall and 3% for fresh bakery,” Anne-Marie Roerink, president of 210 Analytics LLC, observed in the IDDBA report.
“Each of the June weeks increased in dollars, but units were down between 3% and 4%,” she explained. “Father’s Day weekend, the third week of June, was by far the biggest in sales, at $784 million — once more demonstrating the impact of holiday celebrations on total bakery, and perimeter bakery in particular.”
By dollar sales, the top 10 gainers among center-store baked goods in June were cookies (+28.4% year over year), cakes (+20.5%), muffins (+16.8%), bagels/bialys (+15.4%), doughnuts (+13.6%), bread (+12.5%), snack cakes (+12.5%), croissants (+10.6%), buns and rolls (+9.5%), and English muffins and pastries/danish/coffee cakes both up 6.7%. The only down segment was pies, which fell 18.3% in dollars.
“Baked goods items found in the aisle or center-store area adjacent to the fresh bakery increased 12.5% in June 2022 versus year ago,” according to Roerink. “Overall unit sales were up by 0.4%, with some areas up, others down. Center-store cookies gained the most, at +5.9% in units versus year ago — another sign of the return of gatherings and celebrations.”
In the fresh bakery, the largest dollar-sales increases (including fixed and random-weight goods) came in bagels/bialys (+22.5%), muffins (+20.8%), doughnuts (+15.3%), wraps/flatbreads (+13.8%), cookies (+13.6%), buns and rolls (+9.7%), brownies and bars (+9.1%), bread (+4.5%), pastries/danish/coffee cakes (+4.4%) and croissants (+4.1%). Again, pies was the sole category with a dollar-sales decrease, down 11.4%.
“June 2022 continued to see great engagement with the perimeter or fresh bakery section. Almost every area grew dollars, and many grew unit sales as well,” Roerink stated. “These include celebratory items, including cookies, but also morning bakery, including muffins and doughnuts.”
The numbers bear out continued momentum in the perimeter bakery that Chicago-based IRI noted earlier this year, as the category saw a resurgence last year that in part stemmed from the reopening of self-serve and full-service departments closed for some of 2020.
Though center-store bakery fueled baked goods sales amid pandemic-related closures, the aisle bakery generated only slight growth in 2021, whereas the fresh bakery boomed from the return of holiday and special-occasion celebrations, IRI said. The holidays drove strong sales in cakes and cookies in the perimeter bakery, and some smaller categories like muffins, doughnuts, croissants and specialty desserts grew even faster.
Going forward, IRI said, retailers can spur fresh bakery sales with items such as muffins and croissants that offer a “coffee shop-like experience” for breakfasts at home, while offerings like cheesecakes can be served at a party as well as frozen for individual servings later. Restaurant-quality items, too, present an affordable indulgence for customers and an opportunity for grocers, as rising prices at restaurants currently outpace those at retail grocery, IRI added.