As customers look to treat themselves, they’re turning to c-store bakery cases for indulgent pick-me-ups.
Bakery sales are booming and should continue to grow, according to John Benson, partner in the restaurants, hospitality and leisure practice at AlixPartners consulting firm. Over the past two years, he pointed out, total bakery, which includes packaged sweet snacks as well as fresh and prepared bakery, “appears to be outpacing overall foodservice sales growth.”
“It may be a challenge for the category to sustain its recent high growth performance, but we anticipate that convenience stores can continue to grow this category by focusing on offering high-quality and innovative offerings,” he continued.
Today’s c-store consumers most often cite quality, taste and freshness as driving their purchase decisions and, at the same time, are also highly value oriented, added Trevor Boomstra, partner in the restaurants, hospitality and leisure practice at AlixPartners. C-stores are well positioned to “steal share of stomach from other foodservice channels.”
Benson pointed out that bakery is an important category given its strong relevance for the critical morning daypart, which already represents roughly a quarter of foodservice sales and continues to grow 2% year over year. There also appears to be a continued consumer shift away from breakfast meals and toward breakfast snacking — another trend that is favorable for the bakery category, he added.
“One way c-stores can take advantage of these trends is through bundling and promotions with hot dispensed beverages, itself a high growth/high margin category,” he said.
Innovation is another way retailers can grow their bakery category, Benson continued.
“Seasonal flavors and customization built into well-supported limited-time offers (LTOs) are good ways to support growth in the category,” he said.
Serving Up Indulgence
At Rutter’s convenience stores, bakery has expanded beyond the expected doughnuts and muffins into more “elaborate, decadent” options such as brownies, cupcakes, fudge and a frequent rotation of seasonal LTOs, said Cameron Baer, category manager, Rutter’s, which operates more than 84 stores in Pennsylvania, West Virginia and Maryland.
“We’ve had great feedback and numbers since we recently introduced our rich, indulgent cupcakes, which shows that customers like to treat themselves,” he noted.
Among other new favorites are cinnamon rolls. In addition to the bakery case, they are available in hot holding units as well as the “Made for You” foodservice area.
In response to COVID-19 concerns in early 2020, Rutter’s began individually wrapping its bakery items, a practice it plans to continue.
“We want our customers to feel safe about eating fresh items from our stores,” Baer explained.
Rutter’s also links bakery to its Rutter’s Rewards loyalty program. Offers have included a free pastry with the purchase of a cup of coffee.