If you operate traditional in-store bakeries, you understand the difficulty of surviving amid high ingredients costs, soaring fuel prices and a weakened economy. But, what if you had recently introduced a scratch-oriented, service-intensive bakery, complete with on premise-produced authentic artisan breads and fancy desserts and pastries… and were seeking customers not accustomed to upscale products and their commensurate prices?

“Daunting,” you might say. Indeed, that is how officials of Market District describe their challenges since the operator opened its first two supermarkets in 2006. Market District is a unit of Pittsburgh, Pa.-based Giant Eagle Inc., which operates 221 supermarkets in Pennsylvania, Ohio, Maryland and West Virginia.

Yet, despite the obstacles, customers increasingly are embracing the new format, officials say, pointing to combined sales of the two bakeries having grown 52 percent in 2007 from 2006 and currently running 16 percent ahead of last year's pace. Combined weekly volume has soared to approach $100,000, they add.

Under the leadership of Kevin Srigley, senior vice president for Market District, Giant Eagle initiated planning in 2004 for an upscale store format, which would include innovative merchandising, new technologies and revised pricing.

The company launched its new concept by converting two Giant Eagle stores, one in affluent south suburban Bethel Park, Pa. and another in an urbane neighborhood near downtown Pittsburgh. While the center store fills everyday needs, vibrant stand-alone departments throughout each store's fresh foods section and along its perimeter project a boutique appearance in an open-air environment.

The store, with some 50,000 SKUs, creates a visually exciting shopping experience. Independent specialty departments tout nearly 5,000 food and beverage products from 10 countries and regions.

Bakery is front and center

The in-store bakery leads off the store's unique format. Just inside the store entrance, a bakery service employee at a sampling station encourages customers to taste hot-from-the-oven products. Located only 25 ft. beyond the store entrance, the 5,100-sq.-ft. self-contained bakery presents a display of more than 300 American and European-style fancy pastries, decorated cakes, artisan breads and whole and single-serve desserts in custom-made service cases and self-service units.

Market District installed a refrigerated service counter specifically to fill growing demand for single-serve desserts. Garnished to be colorful as well as taste good, items include fresh fruit, nut and flavored custard tarts; varieties of mousse cups; mini tortes and cakes; crème brûlée and tiramisu, among others.

An adjacent service counter displays nine varieties of authentic, on-premise-made artisan breads and rolls, ready to be bagged. Varieties include baguette, Tuscan, focaccia, ciabatta, rye, olive oil, Italian, whole wheat and white.

Formulated by Market District, artisan bread items are among the bakery's signature products. Others, all developed in house, include eight flavors of muffins made of ingredients such as Belgium chocolate and Madagascar bourbon vanilla; four varieties of cornbread and romano/parmesan cheese bread.

All bakery items formulated by Market District are “clean and natural,” says Sean Snoznik, Market District bakery merchandising manager. That is, they must be free of artificial ingredients and preservatives. “This makes our job more challenging, but it's worth the effort. Our customers recognize this.”

Bakery products also play a role in capturing impulse sales throughout the store, according to Matt Lachut, Market District senior marketing manager.

For example, the beverage bar, which offers fresh-roasted coffee drinks and freshly squeezed juices, displays Danish and single-serve pudding and pound cakes for morning sales and cupcakes, bars, decorated brownies and single-serve dessert cakes for afternoon and evening purchases. Sales come from a mix of customers who take them home and who consume them at the store's café seating.

“Bakery foods run hand in hand with coffee and juice drinks,” Lachut says. “Customers appreciate the value, variety and quality of product; we replenish the displays a couple of times each day.”

One edge of the bakery sales area merges into a mixed use area where non-bakery items are intermingled among self-service bakery displays. The store rotates products twice monthly to play to seasonal tastes, Lachut explains. For example, during the summer, items for grilling, such as baking potatoes and flavored charcoal, are displayed with bakery hot dog and hamburger buns. Valentine's Day calls for gift baskets of Market District brand chocolates and decorated cakes.

Training is cornerstone

Behind the service cases, a crew of 44 bread bakers, pastry chefs and cooks, and service staff prepares most of the products from scratch, bases or mixes. Their training in customer service techniques as well as production skills has been the cornerstone for the bakery's growth.

After receiving instruction in Market District policies and what constitutes excellent customer service, a new bakery employee is assigned to a trainer, who provides instruction in several skill sets. The employee is tested and scored on a check-off sheet.