Wheat crop disaster pushes up price of loaf - but only 5p

Any way you slice it - things have been tough in the bread market.

On top of declining sales volumes, bakers have been battling with the effects of a disastrous British wheat crop.

Yet, despite rising costs, the average price of an 800g loaf has risen just 4.3% from £1.15 to £1.20 when comparing the past 12 months with the preceding 12-month period [BrandView.com]. And over recent weeks, the price has dipped slightly.

Promotions have helped to keep prices in check, with deals on 800g loaves - particularly own label and some large brands - deeper over the past six months than a year ago. The average saving has risen from 20.8% in 2012 to 21.5%.

The average retail price of a loaf was fairly static until the autumn, when the impact of the wet weather on the size and quality of the UK wheat harvest began to be reflected on shelf.

In the case of the classic white loaf - which has been hit particularly hard by the 3% year-on-year drop in volume sales of bread [Mintel] - prices have risen by a similar amount to the overall category, from an average of £1.09 to £1.14. The shallowest increase has been at the higher end of the market, with the average cost of an 800g seeded loaf rising just 2p, from £1.30 to £1.32.

Other healthier loaves have risen more steeply, with the average price of brown and wholemeal loaves up 6p to £1.16. That 5.5% increase is dwarfed, however, by the 11.1% rise in the price of an 800g half-and-half loaf from £1.17 to £1.30.

Half-and-half is nevertheless one of the strongest areas of the bread market, with volumes up 1.8% year-on-year [Mintel]. And Allied Bakeries may help to bring prices back down, after this week announcing it was launching a £1 price-marked 800g loaf of Kingsmill 50/50 in the convenience channel.

Prices have been more stable in own-label, with the average price of a loaf rising just 1p to 97p, while the cost of an 800g value loaf has risen 3p to 50p.

One reason for the decline in sales of the traditional sliced loaf is increasing consumer interest in alternatives such as flatbreads and thins, some of which have fallen in price as retailers’ ranges grow. Wraps, for example, have dropped from an average of £1.30 for a pack of eight last year to £1.27.

Other bakery items have also become cheaper, with the typical price of a four-pack of croissants down from £1.25 to £1.20, while the price of a pack of six brioche has fallen from £1.57 to £1.45. Bagel fans, however, are paying an average of £1.23 for a four-pack, compared with £1.11 a year ago.