Specialist bakers not affected by supermarket bread wars: Roy Morgan

Despite Woolworths, Coles and now even ALDI dropping their own-brand white bread prices to outdo one another, specialist stores such as Bakers Delight aren’t under threat, according to a new report from Roy Morgan Research. In fact, market share remains fairly stable for both supermarkets and specialist stores.

Woolworths holds 27% of the bread market, with a mean weekly spend per customer of $5.96. Coles Group holds a 23% share with a mean weekly spend of $5.66. The big two are streets ahead of IGA (7% share) and ALDI (6% share).

When combined, specialist bread shops such as Bakers Delight, Brumby’s Bakery and Delifrance have almost the same market share as Woolworths. However, the mean weekly spend at these specialist retailers is considerably higher than supermarkets:

• Delifrance/other bread shops: $6.85 per customer
• Bakers Delight: $7.37
• Brumby’s: $7.58

“Some media and industry sources claim that Woolies’ decision to discount its Homebrand white bread so heavily could hurt independent and specialist retailers that don’t have the buying power to match such a low price,” said Warren Reid, group account director, Roy Morgan Research.

“But data from Roy Morgan Research shows that consumers who buy their bread from stores like Bakers Delight can afford, and are willing, to pay more, and almost certainly wouldn’t be swayed by an 85-cent white loaf.

“People who purchase their bread at specialist bread stores tend to be very different to those who buy it at supermarkets, and although there is some crossover, offering white loafs for 85 cents is unlikely to change this. Woolies would have been more likely to win over Coles and ALDI customers if these supermarkets hadn’t been so quick to discount their own white loaves in response to the price reduction.

“The real threat will be to the ‘branded’ bread sold through supermarkets, when consumers are forced to compare the two products side by side - one much cheaper than the other.”