In-store Bakeries Quickly Rebound & Adapt to Pandemic Shopper Needs

Aug 18, 2020

Independent retailers have had to pivot hard during COVID-19, and in-store bakery departments are no exception. While center store packaged bakery sales boomed as customers looked to stock up on baked good staples, in-store bakery departments struggled initially with consumer uncertainty around fresh prepared foods.

During the first few months of the pandemic, weekly dollar sales had dropped by as much as 21 percent in fresh bakery departments compared to the year before, according to Information Resources Inc. (IRI). Sales of bread-based products faired well, while sales of cakes, pies, and other “celebration treats” dropped significantly.


The numbers clearly reflect shifts in pandemic shopping patterns as customers looked to bakery staples to support everyday meals and not treats or platters for large group gatherings. Sales of fresh bakery trays, for example, were down a whopping 81 percent in the week ending May 3 this year compared to last, according to IRA data. Graduations and other school-end celebrations didn’t happen in May as they usually do, cutting into sales of large variety packs of sweet bakery products and custom decorated cakes as well as in-store baking for catering.

But after the initial shock, independent retailers have adjusted in-store bakery product lines, packaging, and merchandising strategies to accommodate COVID-19 restrictions and changes in shopper habits. They’ve taken to social media, email marketing, and communicated directly with customers to promote increased health and safety measures in the bakery department. Most importantly, in-store bakeries demonstrate their ability to adapt to customer needs and continue to produce high quality, fresh products and friendly service even during a pandemic. 

Bakeries Recover Quickly

Susanville IGA-800wSusanville Supermarket IGA's bakery quickly recovered sales after demonstrating safety precautions to shoppers.

Rick Stewart, president and CEO of Susanville Supermarket IGA in Susanville, California says the first four weeks of the COVID-19 stay-at-home orders were the hardest. “We saw dramatic impact on both bakery and deli, especially fresh sales later in the day. People were just really reluctant to even try packaged goods in fresh departments, but that’s all recovered now. Bakery recovered quickly.”

Susanville Supermarket IGA’s long, 27-year history as a full-service bakery and the retailer’s quick communication about COVID-19 precautions were critical to its bakery’s recovery.

“We recognized early on that because bakery and deli were all food preparation, we needed to make the customer aware that this was a safe transaction,” Stewart says. The independent retailer posted images and communications about bakery staff and other departments implementing COVID-19 health and safety regulations on the company Facebook page. In addition to installing plexiglass shields at the sales counter, requiring proper PPE for bakery staff, and marking customer areas with recommended social distancing, Susanville’s bakery moved the self-service coffee behind the sales counter. “We were well positioned because we were already a full-service bakery,” Stewart adds. “The only change was the self-serve coffee.” 

SusanvilleIGA FBPost
Fresh Bakery Advantage

Independent retailers with established full-service bakeries have had a big advantage during COVID-19. They’re able to adapt more quickly and even fill in areas of need in the rest of the store. Gary and Leo’s in Havre, Montana, has seen more new customers because of its in-store bakery, says Kathy Osakoda, bakery manager. “Due to COVID, we’ve seen newer faces I think because the other store is more commercial,” she says. “The nice thing about us is we can adjust what we’re making every single day.”

Gary and Leo’s in-store bakeries ramped up bread production to restock the retail bread aisle when commercial bakeries couldn’t keep up with demand. Bakery staff worked overtime to produce four days' worth of bread in one day for about four days. “It was really nice for our customers. WalMart had a hard time getting bread, but we had fresh baked bread,” she says.

GaryLeos Bakery-800w (1)Gary & Leo's bakery shifted to producing more fresh bread to differentiate from chains who were out.

Highland Park Market in Manchester, Connecticut shifted production to produce more daily products too, like breads and morning pastries. “We even packaged our own flour and yeast from the bakery department to sell as ingredients when we sold out of those in the store,” says Tim Devanney, co-president.

Adjusting to Challenges

Keeping store shelves full has been one of the biggest challenges for many independent retailers during COVID-19. A shortage in one department seems to cause customers to buy extra in other departments, including bakery, as sort of a panic purchase. “Customers would come in for an item that was short and end up buying a whole bunch of other stuff that was on the shelves,” Devanney says.

In-store bakery departments have had to adjust production and staffing responsibilities by moving self-serve products behind the counter and packaging more grab-and-go items. Susanville Supermarket, for example, is now pre-boxing variety donuts by the dozen, so they’re ready to go for the morning rush. “As soon as we made coffee full-service, that impacted our ability to put through the donuts,” Stewart says. “Since so many of our customers wanted a dozen “you-pick” donuts, we have them pre-boxed. People appreciate the simplicity of it.”

Staffing was an issue, too, for Gary and Leo’s in the beginning, but the bakery has adjusted. Some staff had to leave for COVID-19 testing and others in high-risk groups were nervous about working. The bakery adjusted by addressing staff concerns and accommodating any special needs when they worked. “We shifted the responsibilities for some to be less customer-facing,” Osakoda says. Ultimately, pulling together as a staff and making the adjustments together has made the bakery team stronger. “Our staff has worked really well together. There were some challenges, but everyone worked as a team. Everyone gets along really well; it’s been kind of nice,” Osakoda says. 

GaryLeos Bakery-300wGary & Leo's bakery staff work well together.

For those retailers who are struggling to staff up their bakery department during COVID-19, IGA CEO John Ross suggests looking to the restaurant industry as a resource. "Bakery is one of those departments that is always hard to staff, but COVID-19 and restaurant closures have given us a bigger pool of candidates," Ross says. "If you're looking to bring in more skilled bakers to up your scratch bakery offering, turning to out-of-work restaurant employees could be a great solution for everyone. Although working in a grocery deli/bakery is hard, many former restaurant employees find it offers a much better culture, lifestyle, and better hours for their family." 

Meeting Demand Where Customers Are

While graduations and spring celebrations may have been cancelled in May, they picked up through the summer and into fall. Families began to gather again to celebrate accomplishments and birthdays, but with close family or a few friends instead of big bashes. In-store bakeries met that need too with 1/4-in. sheet and 8-in. round cakes instead of the pre-COVID half sheets.

“They’re coming to us for our scratch cakes and in-house buttercream. It’s the same good quality it’s always been,” Osakado says. “In recent years people had fallen off carbs, but they’re buying a lot more bread now to have with meals. Pastries are big, and they’re buying comfort food. People are tired of being at home. We see a lot people still out grazing our bakery tables.”

The COVID-19 trend toward home cooking has even benefitted in-store bakeries. “With people not going to restaurants, they’re making more meals at home,” Devanney says. “We’ve seen a lift in single-serve desserts as customers want to cap off their home meals with special treats.”

Focus On Quality and Service

Independent retailers’ in-store bakeries continue to focus on their signature products and strong customer service to weather the COVID storm. “There hasn’t been any ‘big next new thing’ during COVID,” Stewart says.

For Susanville, business is now booming especially for its fresh fried donuts. “We have the best donuts on the planet, and we market them that way,” he says. The packaging and merchandizing of bakery products may have shifted, but, customer demand for quality bakery products and friendly local customer service hasn’t changed. 

“Down the road, we’re going to see grab-and-go stick around. And there will continue to be no ability to sample products,” Devanney says. “We’re seeing a long-term shift back to full service bakery. There will be a mix of that and grab-and-go.”

Most independent retailers with full-service in-store bakeries are in a good position to meet the needs of their customers no matter what the future holds. “The advantage is that we are small and can adapt. We get things out quicker, and our ability to adapt is in our favor,” he adds.




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