UK bakeries capitalizing on increasing footfall of takeaway market: NPD
The market research firm reported that bakery outlets enjoyed the biggest bump of quick-service channels (QSR), with sales rising by 6% and visits by 2% in the past fiscal year ending in April. The category overall saw those numbers jump nearly 20%.
Gen Z consumers (aged 16 to 24) visited 15% more often in the past year, making bakeries the second fastest-growing segment for this age group. Those over the age of 50 also increased their trips to the bakery more than any other segment.
“Say the word ‘bakery’ and some might think of a traditional ‘old school’ family-run business that sets to work each day well before dawn turning out bread, savory bakes, pastries and cakes for sale across the counter,” said Peter Linden, insight manager for NPD’s UK foodservice division.
“Those outlets still exist throughout Britain. But there are many other ambitious outlets already competing head-on with the big high street names.”
He added that competition will ‘heat up.’
“Bakery chains are ideally suited to riding some of the big trends in British foodservice and have responded imaginatively to consumer demand for convenience.”
A go-to for snacks to-go
British consumers already turn to bakeries for on-the-go eats to the tune of £1.2bn ($1.5bn). In fact, eight of 10 bakery purchases fall into that category, according to NPD. But the UK’s total takeaway market has surpassed the £20bn ($25bn) mark, up from only £1bn just five years ago, meaning ‘there is clearly room to grow.’
NPD contends that bakeries could improve their click-and-collect sales from their current share of 3%. Delivery can also provide an additional boost, having grown more than 60% in the past year alone, alongside a 47% increase in value.
On the upside, consumers are increasingly walking into bakeries over other QSRs or convenience stores to find snacks, boosting sales in that subset by 10% from last year – more than any other QSR segment. NPD attributed this rise in part to deals and promotions, which attracted nearly 1.5bn visits.
“Many businesses – small and large – are moving away from their traditional bakery offering to a sharper food-to-go focus,” said Linden.
“This involves putting on good coffee, offering new food choices such as pizza, salads, pasta, hot sandwiches, croissants, pastries and much more, and meeting the demand for click & collect and delivery.
“Bakeries by their very nature focus on food-to-go and this is where the growth is, with sales in this part of Britain’s total OOH [out-of-home] market having grown by 8% in the year to April 2019.”
He recommends that bakeries pursue growth by pushing to-go and delivery orders, especially at breakfast and on weekends. They can also benefit from expanding or doubling down on dayparts outside their typical morning and mid-day service.
For instance, Panera – known for its pastries and sandwiches – is testing dinner in Lexington, Kentucky. The menu will feature flatbreads, rice and quinoa bowls, and two hot sandwiches.
