Independent bread and cake retailers worked hard for their dough over the past five years
Melbourne, Australia (PRWEB) July 11, 2012
The Bread and Cake Retailing industry has faced intense competition over the past five years. This has been due to new entrants like supermarkets, convenience stores and milk bars attempting to boost their share of this market. Competitive trading conditions led to modest annualised growth in industry revenue of 2.3% over the five years through 2012-13. According to IBISWorld industry analyst Claudia Burgio-Ficca, “retail sales during this period were affected by fluctuations in real household disposable income, consumer sentiment, interest rates and the high price of wheat”. Demand was also driven by changing consumer tastes and preferences across a number of bread and cake categories, along with the rising popularity of products that meet dietary requirements, like gluten-free products. Industry revenue is expected to increase by 1.7% to $5.84 billion in 2012-13. The stable rise in sales will be driven by overall growth in consumption. Growth in product availability has been fuelled to some extent by the introduction of instore bakeries across the major supermarket chains, along with increasing consumer awareness about the benefits of eating multigrain bread as opposed to traditional white bread.
Historically, bread and cake retailing was a fragmented industry comprising numerous small-sized, independent operators catering to the local needs of their community. However, concentration levels have undergone considerable change over the past decade. Burgio-Ficca adds, “the entry of supermarkets into bread and cake retailing through addition of instore bakeries altered the mix of players in this industry, with supermarkets effectively muscling-out independent bakeries and smaller franchise retailers”. Market share concentration is thus medium, and industry major players include Woolworths, Wesfarmers and Bakers Delight.
The Bread and Cake Retailing industry in Australia is expected to post modest growth over the next five years. Independent bakers and retailers are expected to combat the competition from supermarkets by introducing fresher, more innovative loaves. They will likely start investing in marketing and advertising campaigns to increase brand awareness by focusing on their points of differentiation such as artisan and specialty breads. Consumer demand during this period will be driven by steady income growth and continued education and social acceptance about the health benefits associated with eating more protein-rich bread varieties such as brown, multigrain and rye. The market is expected to remain highly competitive, with supermarkets looking to increase their share of the bread sector by expanding their product lines and stores, and through aggressive promotion.
For more information, visit IBISWorld’s Bread and Cake Retailing report in Australia industry page.
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IBISWorld industry Report Key Topics
Retailers in this industry sell bread, cakes, tarts and biscuits. These goods are either made on premises or they are purchased from wholesalers for resale to consumers.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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