Summary of Key Points
Over the past year, 87,000 street-side bakeries across the country have closed, with only 15,000 new ones opening (a ratio of one opening to six closures). The average lifespan of a new bakery is merely 32 months, and more than 57% fail within two years. However, bakeries in supermarkets and online private craft bakeries are experiencing exceptional success. The main reason for the decline of street-side bakeries is their weak risk resistance. Those that have survived do so either by offering competitive pricing and a unique selling proposition or by focusing on niche markets and building a strong reputation.
Why Have Street-Side Bakeries Faced Mass Closures?
The survival logic of street-side bakeries has long fallen behind the times, mainly due to three issues:
1. Exorbitant Costs: Rent in prime locations continues to rise annually, leaving individual shops with no bargaining power. High labor costs and volatile prices for ingredients like dairy cream and butter further exacerbate the financial pressure. Who would be willing to pay over 20 yuan for a loaf of bread?
2. Outdated Business Models: Still relying on customers coming to the store? Consumers' attention has been captured by brands that actively promote themselves on platforms like REDnote and TikTok. Failing to produce attractive photos or leverage social media effectively means losing business to competitors.
3. Fierce Competition: Supermarkets offer affordable options (e.g., 9.9 yuan for four croissants), while online private bakeries rely on word-of-mouth to generate orders even a year later. Street-side bakeries are caught in the middle, with no competitive advantage in terms of price or distinctiveness.
Why Are Supermarket Bakeries So Popular?
The success of supermarket bakeries stems from addressing two common consumer pain points: convenience and cost-effectiveness:
1. Affordable Prices: Items like four croissants for 9.9 yuan or 16 Swiss rolls for 59.8 yuan (less than 4 yuan each) are significantly cheaper than street-side options, often with additional discounts (e.g., 30% off after 8 PM).
2. Convenient Access: Customers can easily purchase baked goods while shopping for groceries, making it convenient to prepare breakfast the next day. Supermarkets like Sam's Club and Hema even use the aroma of freshly baked products to attract customers, creating a cozy shopping experience.
3. Reliable Brand Image: The quality of products sold in large supermarkets is assured, providing customers with peace of mind. Data shows that supermarket bakery sales increased by over 20% in 2024, with Sam's Club's Swiss rolls selling over 1 billion units and Hema's strawberry box cakes seeing a 80% increase in sales.
Consumption Patterns Have Changed
No longer do people need to go specifically to street-side bakeries to buy baked goods; they can be purchased anywhere:
- While shopping for groceries, customers can also pick up some snacks like mochi. Convenience stores offer bagged toast, and coffee shops like Luckin's provide soft cookies as part of their breakfast options. Even hotel buffets now include freshly baked products.
- The traditional advantage of street-side bakeries (location) is no longer a factor; consumers no longer need to make a special trip to buy baked goods.
What Makes Successful Bakeries Stand Out?
Not all bakeries fail, and these examples offer insights for those struggling:
1. Online Private Craft Bakeries: These businesses build a loyal following by focusing on quality and authenticity (e.g., using natural ingredients in their products). Although production volumes are low, their strong reputation allows them to generate orders even a year later.
2. Supermarket Bakeries: By integrating bakeries into the shopping experience, they attract more customers. For example, some supermarkets place bakery sections at the entrance or expand these areas to encourage browsing and purchasing.
3. The Key is to Differentiate: Instead of competing on price, focus on creating a unique selling proposition (e.g., specializing in the best-loved baked goods) or locating your business in high-traffic areas.
In Conclusion
The bakery industry is not dead; it's just that the era of easy profits has passed. To survive, street-side bakeries need to either excel in a specific area or adapt to consumer behavior. Nowadays, people buy baked goods as part of their daily routine, rather than making a special trip for them.