Supermarket bakery’s hidden growth opportunities explained:
- Half of consumers choose supermarket instore bakeries first when buying sweet bakery, yet poor lighting, over-facing and unclear zoning can undermine sales.
- Familiar formats remain the strongest foundation, with doughnuts purchased most frequently, followed by cakes and cookies.
- Manufacturers that consider merchandising during product development can give retailers a stronger commercial case and improve shelf execution.
Sweet bakery has many of the qualities supermarkets want from an impulse category, with products that are visually appealing, widely understood and affordable enough to provide an everyday treat. Even so, an attractive doughnut or slice of cake can lose its pull when it’s squeezed into an overcrowded fixture, poorly lit or surrounded by too many similar alternatives.
Half of consumers choose an instore bakery as their first destination when buying sweet baked goods, according to Nestlé Professional’s new Retail Sweet Bakery Report. Supermarket bakeries also account for 28% of all sweet bakery occasions in a UK market valued at £2.7bn, giving retailers a strong starting point from which to increase sales.
“Supermarkets are firmly established as a destination for sweet bakery purchases, but shoppers are becoming increasingly selective in how they navigate the category,” says Irene Ferre, insights lead at Nestlé Professional UK and Ireland. “Understanding what attracts attention, builds confidence and encourages purchase is becoming increasingly important as supermarkets look to create more engaging bakery experiences.”
Merchandising should be considered while the product is still being developed, not after the listing has been secured. Suppliers that can show retailers how a line should be positioned, which products it should sit beside and how it will look after several hours on shelf will present a stronger commercial case.
More choice isn’t always the answer
Adding more flavours, pack sizes and seasonal launches may create the impression of a lively bakery offer, but an extensive range becomes counterproductive when shoppers struggle to distinguish between products. Nestlé Professional identifies over-facing, inconsistent lighting and unclear zoning among the issues weakening supermarket bakery departments.
“Retailers should focus first on making the bakery fixture easy to shop,” comments a Nestlé Professional spokesperson. “That means clear zoning, good product visibility and a strong core range built around formats shoppers already buy, such as doughnuts, cakes and cookies.”
Once the basics are working, retailers can use innovation to refresh the fixture without overwhelming shoppers.
“Presentation also matters. Our research shows product appearance is the first thing 37% of shoppers notice,” adds the spokesperson. “Seasonal flavours, limited editions and branded products can then be used to add interest without making the range more complicated.”
Every launch must therefore earn its place. Suppliers need to explain which occasion the product serves, how it differs from adjacent lines and whether it can generate an additional purchase rather than diverting spending from an existing product.
The report points towards familiar formats as the most productive place to begin, with doughnuts the most frequently purchased sweet bakery item among respondents, followed by cakes and cookies.
“The strongest opportunity is in familiar formats. Doughnuts are the most frequently purchased at 43%, followed by cakes at 39% and cookies at 33%,” says the spokesperson. “For retailers, the priority should be getting those core formats right and then bringing in newness through seasonal flavours, limited editions, toppings, fillings and branded variants. The report also points to interest in sharing formats and smaller portions – offering more flexibility around pack and portion size is another area to watch.”
Familiar formats can still support considerable innovation. A doughnut can carry a seasonal flavour, a cake can be adapted to suit a different eating occasion and a cookie can offer a more indulgent filling without asking shoppers to understand an unfamiliar product.
This gives manufacturers a tighter and potentially more productive development brief. Sharing packs could address social occasions, while smaller portions may appeal to shoppers who want a treat without committing to a larger product or multipack.
Product appearance must remain central throughout development because 37% of shoppers identify it as the first feature they notice. Finishing, consistency, packaging and shelf condition can therefore carry as much commercial weight as the flavour concept behind the launch.
Testing should reflect the conditions the product will encounter after leaving the factory, including transportation, store handling and several hours on display. A topping that deteriorates quickly, icing that marks the inside of the pack or packaging that obscures the product can undermine the visual appeal on which an impulse purchase depends.
Brands can reassure but shouldn’t crowd out own label
Nestlé Professional found that 63% of shoppers are more likely to buy sweet bakery featuring a familiar brand, while 57% feel more confident choosing it. More than half of those surveyed would also like to see well-known brands represented within supermarket bakery ranges.
“Sweet bakery remains a highly valuable category for supermarkets, but our research suggests there is still untapped potential,” notes desserts category lead Danielle Griffiths.
“Consumers are looking for products that deliver on taste, quality and value, while also offering moments of excitement and indulgence. Familiar brands can play an important role in building shopper confidence and helping products stand out in what is often a highly visual and impulse-driven category.
“This isn’t about reinventing sweet bakery. It’s about understanding what drives shopper choice and using those insights to maximise the potential of a category that remains an important part of the grocery shop.”
Recognition can help shoppers make a quick decision because an established confectionery, biscuit or dessert brand carries expectations about flavour and quality. However, familiarity alone doesn’t prove that adding another branded SKU will increase total category sales.
“Branded bakery should sit alongside a retailer’s core own-label range, not replace it. The role of the brand is to help products stand out, give shoppers confidence around taste and quality, and create a reason to trade up. The key is to use branded products selectively rather than adding more SKUs for the sake of it. Our research found 63% of shoppers are more likely to buy sweet bakery featuring a familiar brand, while 57% say they feel more confident choosing bakery with a familiar brand.”
A clearly structured fixture could allow core own label to provide familiar, accessible choices, premium own label to encourage trading up and selected branded products to introduce recognisable flavours or limited-edition excitement. Problems arise when several tiers compete for the same shopper and occasion without providing a meaningful point of difference.
Bakery manufacturers proposing branded collaborations need to offer buyers more than consumer awareness figures. A strong pitch should explain where the product belongs in the fixture, which occasion it addresses, how its price compares with the surrounding range and whether it’s expected to attract incremental spending.
Retailers will also want to know which existing line could lose sales if the launch succeeds. Cannibalisation isn’t necessarily a reason to reject a product, particularly when the replacement commands a higher price or margin, but it shouldn’t be presented as category growth.
What supermarkets can learn from cafés
Supermarkets offer convenience, value and access to substantial shopper traffic, while cafés and specialist bakeries are often more accomplished at turning an ordinary baked product into a treat that looks freshly prepared and worth noticing.
“Supermarkets are already a key destination for sweet bakery, but there are ways that the fixture can work harder,” says the spokesperson. “The report points to inconsistent lighting, over-facing and unclear zoning as common issues. Cafés and specialist bakeries tend to do a good job of making products look fresh, visible and appealing, with clear flavour cues and stronger presentation. Supermarkets can apply some of those principles while keeping the convenience and value advantages they already have.”
Applying those principles doesn’t require supermarkets to copy the service model or cost base of an artisan bakery. Improved lighting, well-maintained displays and clearer flavour signposting could change how shoppers perceive the range without requiring retailers to expand it.
Freshness also needs to be demonstrated rather than assumed. An instore bakery sign may not persuade shoppers that products have been recently baked, finished or replenished unless the packaging, display and condition of the range support that impression.
Manufacturers can make execution easier by developing products and packaging around the realities of a busy store. Display-ready cases, trays that can be refreshed quickly, decoration that withstands handling and clearly visible flavour descriptions can all help staff maintain an appealing fixture throughout the day.
“Supermarkets are already a key destination for sweet bakery, but there are ways that the fixture can work harder. The report points to inconsistent lighting, over-facing and unclear zoning as common issues. Cafés and specialist bakeries tend to do a good job of making products look fresh, visible and appealing, with clear flavour cues and stronger presentation. Supermarkets can apply some of those principles while keeping the convenience and value advantages they already have.”
Supermarkets already possess the shopper traffic, established buying occasions and a leading position in a £2.7bn category. Capturing more of that value may not depend on another doughnut flavour or high-profile collaboration, but on whether shoppers can see the product, understand the range and choose their treat before the fixture persuades them to keep walking.
