Despite recent announcements from the nation’s supermarkets that Homebrand bread will be dropping to 85c per loaf, data from Roy Morgan suggests that the price reduction will have no impact on smaller specialist bakeries.
Roy Morgan says that overall, supermarkets account for almost two-thirds of Australia’s total weekly spend on bread. Woolworths holds the largest share of the bread market at 27 percent, representing a mean weekly spend of $5.96 per customer,. Coles comes in second with a 23 percent share representing $5.66 per customer, IGA holds seven percent and Aldi six percent.
Specialist bread shops such as Baker’s Delight, Brumby’s Bakery and Delifrance have a combined share of the market comparable to that of Woolworths at almost 27 percent. However, the mean weekly spend is higher than that of the supermarkets ranging from $6.85 at Delifrance, $7.37 at bakers Delight and $7.58 at Brumby’s Bakery.
Group account director of Roy Morgan research, Warren Reid says that despite claims that 85c bread could impact heavily on independent and specialist retailers, data has shown that consumers who purchase their bread from specialist stores and bakeries are willing to pay more for it and would be highly unlikely to “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,” says Reid. “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.”
Chart: Roy Morgan