4 minute readSandwich Shop
Local stores are back – and freshness sells best
By Chris Houston, Group market intelligence manager, Lantmännen Unibake International
The small grocer’s shop was indispensable to local communities until supermarkets lured consumers away to do all their weekly shopping under one roof. As large chain stores built bigger and better outlets in out-of-town retail parks, thousands of local stores were left hanging on Europe’s street corners – out of mind and out of business.
Today, the comeback of the corner shop is reviving those nostalgic memories of old. But this time, it’s the large retail chains themselves that are behind many of the local outlets – Tesco and Sainsbury’s in the UK, for example, or French Carrefour. The trend is a response to a growing urban population and smaller households that want to shop little, often and near to where they live.
One of the drivers of this increased shopping frequency is the desire for fresher foods. In the past, consumers often judged a store by the freshness of its fruit, vegetables and meat. Nowadays, however, the quality of the fresh bakery counter is at least as important. Many retailers are experiencing that a tempting front-of-store bakery section can put an extra two to three euros in the shopping basket by the time shoppers reach the till.
The global business consultants Bain & Company reported on the convenience store trend in Forbes.com in early 2017. Accordance to their market intelligence, convenience stores are already growing 5% a year in Europe and could reach 7% growth by 2025.
Perhaps their most hard-hitting prediction is that Europe’s traditional supermarkets and hypermarkets will see their share of the grocery market decline from 70% today to as little as 48% in less than a decade. With a forecast like that, it’s no wonder that retailers are looking for new ways to differentiate themselves – through smaller, convenient outlets with a strong fresh food range.
In-store bakeries have proven themselves an important part of that differentiation. Bake-off consumption is currently growing 3.3% a year, according to Gira market research. That’s 16.5 times higher than the figure for total bakery consumption in Europe. Among consumers, a counter full of aromatic bread and pastries is synonymous with quality, freshness and value – for which they are clearly willing to pay a little more and, apparently, regardless of where they shop.
The discount chain Lidl is among the retailers that have achieved success with a front-of-store bakery counter that signals premium quality and adds value to the shopping basket. It also supports Lidl’s continuing expansion into new markets. In another retail chain in Finland, a new bakery concept has driven up sales by 15-25% in 300 retail stores.
With a relatively small investment, an in-store bakery for bake-off products can be easily installed in almost any outlet. A growing number of service stations, for example, have introduced in-store bakeries to attract customers even when they don’t need to refuel the car.
What seems clear is that fresh bake-off products inspire consumers across the board – and in a way that a counter full of fresh fruit and veg never has. On that note, I’ll leave you with an interesting question for a future post. Is there any type of retail outlet where an in-store bakery wouldn’t work? That’s something to think about as we retrace our steps back to the corner store.