Christmas retail sales will likely disappoint this year across the board. A survey by NPD Group Inc., a market research company, showed that this holiday season, 26 percent of consumers plan to spend less than they did the previous year. Last Christmas, 18 percent of people surveyed planned to spend less. In both years, eleven percent of respondents said they planned to spend more.

Marshall Cohen, chief industry analyst with NPD, is for the first time predicting sales will be flat to declining. “With consumers already saying they plan to spend less, stores with lean inventories, and tightening credit for both businesses and consumers, where can growth come from?” he asked.

The silver lining for bakeries is food appears as one of the top ten items most likely to be given as a gift. Results showed that, with no must-have gift for the season, 60 percent of consumers will be purchasing on overall value for the price.

St. Agnes finds growth with comfort food

While the economy has not been good to small businesses lately, some bakeries are reporting positive results and even growth in some market niches. Dan (Klecko) McGlynn, owner, St. Agnes Bread Co., St. Paul, Minn., says his specialty wholesale bakery is doing just fine in many of the medium to lower-priced restaurants that his company supplies.

St. Agnes Bread Co. produces breads, buns and rolls for more than 250 accounts. Klecko's theory is that people are still eating out, but probably not at high-end restaurants.

“I'm not seeing the dollars dropping as much among the sports bars, diners and comfort food places we supply,” Klecko said.

These types of venues require different types of bread products, such as hamburger buns and soft rolls, but people still want quality, he said. “We're going after them with artisan hamburger buns, potato buns and egg buns.”

The bakery still applies slow fermentation processes and top ingredients, such as potato flour and sesame seeds, to its bun doughs. St. Agnes is even finding new customers with its artisan bun line, Klecko added.

Customer behavior to expect in 2009

Consumers are shaken by the global economic crisis. But many Americans are cautiously optimistic about potential for better times. Consumer and product researcher Mintel predicts five consumer attitudes to expect in the coming year.

• Customer in control: Consumers will seek products that give them exactly what they want, when they want it, especially as budgets tighten.

• Simplify and purify: People will demand that companies communicate openly. From understandable ingredients to clear businesses practices, consumers will demand transparency in the products they buy.

• Rebuilding trust: Feeling swindled by Wall Street, Americans will seek trusting relationships with those with whom they do even casual business.

• Trading down (but sometimes up): Shoppers will generally trade down to more budget-friendly products. But bakeries should make note that occasionally, people also will need to indulge in small, affordable luxuries.

• Playfulness lightens the mood: Small, playful distractions like fun-toeat baked products become increasingly popular as people try to have a little fun.