At any of the 79 P & C, Quality and BiLo retail food markets in New York, Pennsylvania, Vermont and New Hampshire, shoppers don't have to find the bakery department. Instead, the bakery department finds them the minute they step into the store.
According to Roy Osborne, senior category manager for Syracuse, N.Y.-based Penn Traffic Co. that owns and operates markets under the P & C, Quality and BiLo banners, the bakery department “owns” an average of 1,300 sq. ft. in each of the 30,000 to 40,000-sq.-ft. stores. But when it comes to marketing and merchandising, bakery has no boundaries.
“We're always looking to expand our product presence and availability into spaces we don't own from walk-in to checkout,” he explains.
As a result, shoppers will find tables full of still-warm Italian loaves, colorful cupcakes, cookies and other treats at the front entrance. From there, can't-miss displays of breads, cakes and other products in virtually every department and by the cash registers not only encourage impulse sales, but continually emphasize the presence of a working bakery in the stores.
According to Pat Myers, bakery merchandiser, no department is off-limits to the bakery. Tables filled with sweets are positioned near the dairy section. Rolls, two-pack big cookies and pie and cake slices are displayed in the deli. And on SuperBowl Sunday and Valentine's Day, the biggest days of the year when men shop by themselves, special game-time or gift-oriented product displays were set up in the beer aisle, Myers adds. Osborne would even like to merchandise the department's sugar-free sweets in the stores' pharmacies.
“We've learned through independent customer surveys that we're considered a destination bakery, despite the fact that we're surrounded by other major supermarkets and specialty bakery product chains,” he notes. “That's exactly what we want because we want to be known as the ‘around the corner bakery’ in our communities.”
Penn Traffic has its roots in the early 1940s, before the introduction of self-service supermarkets, when a group of producers formed a cooperative called P & C Markets to emphasize the producer/consumer connection. In 1942, the cooperative opened its first two-story, 24,000-sq.-ft. store in Batavia, N.Y.
Over the next six decades, the company expanded to a total of 300 units through the opening of its own new corporate stores and the acquisition of four other chains. To service the bakery departments in all of these stores, the company opened its own frozen dough production plant.
Within the last five years, Penn Traffic closed a large number of underperforming stores to consolidate its operations and increase profitability. As a result, the demand for dough declined dramatically, making it more financially expedient to shut down the central production facility. Two years ago, the company closed the plant and outsourced its frozen dough products.
Healthy sales hike
Bakery sales climbed from 3 percent of total store sales four years ago to 3.9 percent earlier this year, then to 4.25 percent by the end of October. Aside from supplying its own stores, Penn Traffic also provides the same programs, frozen and mix products and technical support to more than 120 units representing other chains and independent markets that sell the bakery items under their own labels. This outside wholesale segment represents about 40 percent of the company's total bakery sales.
Each of Penn Traffic's in-store bakeries is staffed by a seven- or eight-person team and is equipped with a 40-qt. to 80-qt. mixer and rack ovens; most have fryers and glazing tables and some have sheeters. All of the baking and decorating is done in an open format in front of the customers.
Sixty percent of the products are made from frozen doughs, 15 percent are thaw-and-sell, 10 percent are par-bake, 10 percent are mixes and the remaining 5 percent are made from frozen batters. Production begins at 2 a.m. to prepare the donuts, muffins and other breakfast items for the stores' 6 a.m. opening.
Cake and yeast-raised donuts currently account for about 15 percent of total bakery sales. The majority of Penn Traffic's stores are equipped with fryers for producing up to 27 donut varieties from frozen pucks along with glazing tables and icing conditioners for decorating. The few units not equipped with fryers use pre-fried donuts, but finish them by hand, “so they can participate in the creative fun,” Osborne says.
Among the best-selling donuts chain-wide are headlights, donuts iced with chocolate and topped with a dollop of buttercream; taillights, which feature a dab of raspberry filling in the center of the cream and fog lights, with lemon filling in place of the raspberry filling on taillights. Customers also anticipate the arrival of seasonal specialties, such as apple spice donuts in the fall, Osborne notes.
To maximize the visual impact of the more than two dozen varieties, Penn Traffic has created a self-serve, glass-door donut wall. In the older stores, the wall is 12 ft. to 18 ft. long. In newer stores, the walls are 10 ft. long.
“We've downsized the dimensions, so that the shelves will look fuller longer and turn better,” Myers explains.
Wall of product
Donuts share the wall with 16 varieties of muffins (which account for 6 percent of total bakery sales) baked from pre-deposited frozen batter, large iced “half moon” (a.k.a. black and white) cookies, bagels baked from frozen dough in steam-injected ovens and various other Danish and morning pastries. In addition to selling individual donuts, muffins, bagels and pastries from the wall, the bakeries also offer grab-and-go multi-packs on tables on the retail floor. Donuts are available in six-packs, muffins and bagels in four-packs.
While donuts get the stores' sales off and running in the morning, Italian bread is a steady seller all day into the late afternoon. Bread as a category, which includes Italian as well as 18 artisan varieties, such as sesame semolina and roasted garlic, account for about 20 percent of bakery sales.
“Italian bread is the number one SKU out of our warehouse and accounts for about 15 percent of total bread sales,” Osborne says. “Our corporate P & C chain stores move between 12,000 and 16,000 units per week.”
The 16-oz. proof-and-bake Italian bread program was introduced into the stores seven years ago when Penn Traffic launched its artisan bread product line. A big part of its appeal is the fact that, with a regular 8 a.m., noon and 4 p.m. “ready-time” baking schedule, shoppers know exactly when they can get their loaves as they come out of the oven.
“Customers come early and wait patiently for their hot loaves,” he says.
Three months ago, the stores extended its artisan bread line by introducing 6.5-oz. demi loaves and 11.5-oz. ciabatta baguettes, which are well on their way to becoming signature items. Other par-baked demis, such as multigrain, walnut wheat raisin and olive, also are moving well.
Cakes make up another 20 percent of sales and the bakeries turn them out in numerous sizes, flavors and configurations from frozen pre-baked 8-in. layers and sheets as well as mixes for an expanding line of crème cakes. Customers looking for smaller portions are making the 17-variety line of petite cakes, a one-sixteenth sheet cake, increasingly popular. Stores also have the option to carry the 10 varieties of a 5-oz. cake dubbed Simply Delightful.
“One of the reasons customers choose our cakes over those from other bakeries and supermarkets is our custom-made buttercream icing, which is rich, creamy and not overly sweet,” Osborne says. “We get it in cubes and add water in quantities to produce the various consistencies for covering cakes and making flowers.”
Single-layer, cream-topped 5-in. Kool Whipped Delight cakes offer shoppers seasonal surprises with rotating flavors, such as key lime for summer and caramel nut for fall. Another season-inspired line features five different whimsically decorated 5-in. cakes, such as the watermelon that mimics the summer fruit with a mint buttercream icing “rind,” raspberry “flesh” and chocolate chip “seeds.” Last fall, a chain-wide contest challenging stores to promote the seasonal cakes yielded $30,000 in sales in two weeks.
Creative merchandising
Creativity also is a key to merchandising the stores' cavalcade of decorated cakes. Decorated cakes are displayed in 24-ft. to 64-ft. service and self-service refrigerated showcases. A wide array, including birthday and wedding cakes, also are displayed in two- to seven-door self-service freezers.
“The glass-door freezers are great for showing off the cakes, particularly the ones with character decorations, which we display at kids' eye level,” Osborne says. “We also have been able to expand our offerings to include items such as the 12-in. round chocolate chip cookie ice cream sandwich cake that was such a hit last summer.
“Customers have no problem buying cakes from the freezer,” he adds. “And because we can extend the products' shelf life, we can offer a wide variety all the time with minimal shrink.”
He estimates that shrink for the entire bakery department averages only 6.5 percent.
A few months ago, the company developed a new line of 8-in. round Extreme Crème Cakes, boosting traditional cake varieties with flavor and textural add-ins, such as marshmallows and nuts, to create selections that include Monster Mash, S'mores and Crunchberries. The souped-up versions sell at the same price as the regular flavor crème cakes.
“We like to have fun with our products, combining different ingredients, presenting them in different forms and giving them catchy names to make them stand out,” he says.
But, Osborne admits, not all product lines tested by the company earn permanent status. Mousse-filled items, for example, never caught on. Neither did 4-in. or 8-in. pastry shell-based fresh fruit tarts. However, a variation using the same fruit topping and glaze on top of a layer of yellow cake accented with almonds has done very well.
Cookie sales are on the rise, accounting for 10 percent of sales, up from 7 percent last year. Made from frozen batters, the bakeries offer 2-oz. everyday cookie varieties in 10-count and 24-count packages; 10-count packages of gourmet flavors and six-count packages of raisin-, raspberry-, apple- or lemon-filled varieties. Large iced cookies, such as half moons and iced pumpkin cookies, also are sold from the self-service donut wall.
While the stores continue to carry bake-off 8-in. fruit and 9-in. gourmet pies, the company eliminated its longtime standard 8-in. cream and custard pies, replacing them with 6-in. and 10-in. options last year.
“The 8-in. pies tend to be too big for everyday, but not big enough for parties,” Osborne says.
“By constantly introducing new and reconfigured products, we create our own holidays between the traditional ones,” he explains.
But it doesn't necessarily take fancy shapes, decorations or flavors to keep customers coming back.
“Changing product displays and signs is an easy and instantaneous way to spike sales,” Osborne explains.
Penn Traffic at a glance
Headquarters: Syracuse, N.Y.
Date founded: January 1942
Number of corporate stores: 79 (46 P & C, 22 Quality and 11 BiLo)
Number of in-store bakeries: 75
Bakery/store size: 1,300 sq. ft./30,000 sq. ft. to 40,000 sq. ft.
Market served: Central New York, Central Pennsylvania, Vermont, New Hampshire
Website: www.penntraffic.com
Bakery management: Roy Osborne, senior bakery category manager; Pat Myers and Linda Szczepanski, bakery merchandisers
Primary business: 60 percent retail to own in-stores, 40 percent wholesale to other markets
Major competitors: Wegman's, Price Chopper, Tops and Giant Eagle
Production methods: 60 percent frozen product, 10 percent par-baked, 15 percent thaw-and-sell, 10 percent mixes, 5 percent frozen batters
Major equipment: vertical mixers, tabletop sheeter, retarder/proofer, donut glazing table, donut icing warmer, decorating airbrush unit, computerized decorating machine, refrigerator, freezer, refrigerated and dry service showcases, refrigerated and dry self-service showcases, bread slicer
Plans: continue to develop bakery product lines and merchandising
Penn Traffic a sampling of prices
| Crème cake, 16 ozs. | $3.99 |
| Italian bread, 15 ozs. | $1.99 |
| Ciabatta baguette, 11.5 ozs. | $2.69 |
| Demi-ciabatta baguette, 6.5 ozs. | $1.49 |
| Petite cake, 16 ozs. | $4.99 |
| Muffin, 4 ozs. 4-count | $ 1.19 $4.29 |
| Headlight donut, 2.5 ozs. half dozen dozen | $0.69 $3.49 $5.79 |
| Cake slice, 4 ozs. | $1.89 |
| Pie slice, 5.4 ozs. | $1.99 |
| Specialty cake, single layer, 8 ins. | $7.99 |
| Pie, 6 ins. | $3.99 |
| Pie, 10 ins. | $8.99 |
| Simply Delightful cake, 5 ozs. | $3.29 |