Bakery price rises fail to reflect 2007 cost increases

14 December, 2007
Page 4 
Latest pricing data shows how own-label and budget breads have seen minimal price increases over 2007, with the big brands also slow to increase prices, despite steep rises in the cost of ingredients.
Budget lines have been affected most. For example, comparing prices from January 2007 with those gathered last week suggests that lines such as a six-pack of own-label budget pitta breads have remained static at 26p all year.Meanwhile, in-store bakery lines have seen comparatively modest increases; for example, a 400g wholemeal loaf has gone up in price by 8p over the year, from 52p to 60p, according to price comparison data on the Tesco.com website.However, in that time, flour prices have risen by around £154 a tonne, adding an estimated 15p in cost price of an 800g loaf, before other overhead price increases are taken into account, according to expert sources. The data shows that big brands Warburtons and Hovis increased retail prices by 20p and 18p respectively over the year. However, Kingsmill has only seen an 8p a loaf rise, the data suggests, putting the price of an 800g Kingsmill wholemeal medium sliced loaf up to 96p. That compares to £1.12 for a square-cut Hovis loaf and £1.16 for an 800g loaf of Warburtons.Regional bakery Braces has also implemented retail price increa-ses, with a medium 800g white loaf up 17p over the year.Analyst Martin Deboo noted that Premier Foods had been alone among the plant bakers in reac-ting quickly and putting through prices increases on its Hovis brand to a level sufficient to recover flour price increases. It did this in February, September and October, before its rivals moved. The other big plant bakers were slower to respond, with Warburtons only just putting through a wholesale price increase. But that delay had hit Hovis' market share, with sales volumes down as much as 12% year-on-year, said Deboo.Federation of Bakers director Gordon Polson said: "Bakers will be hoping for a period of stability and a normalised market i



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