bake - April 2012 - 24

volumes to increase prices, but have used it to lower them on a category basis.” As a result of higher ingredient costs, Murphy says this year they are looking to buy larger quantities of bakery ingredients directly from commodity brokers. Other retailers are taking similar types of action. Kretchmar says they have increased the number of suppliers, as a hedge against sudden price ﬂuctuations. “And on a weekly basis, we monitor who has the lowest price on the items we use,” he says. “We do not switch to cheaper ingredients, but try to get those ingredients we use at the best price possible.” Customer service equation Never underestimate the power of strong customer service to keep your proﬁts on the rise. “We have a strong focus on providing excellent customer service and it seems to be working,” Schurman says. “Our customer counts are up again. Even with the down economy, our sales have stayed level or increased every year.” Kretchmar’s Bakery emphasizes the value of “great products at a fair price,” Kretchmar Schurman also examines how other
Above: Indulgent products like hot chocolate and delicious cookies are a perfect ﬁt for today’s consumers.

says. “We have a clear understanding Superior customer service remains a key factor in your proﬁtability. of what our costs are and what we need to charge. The number one reason businesses lose customers to their competition is due to poor treatment by a sales person. Having the right sales people with the right personalities truly does make a difference in sales numbers. Training that staff also helps immensely. Another aspect of customer service the big guys miss is serving the individual needs of a customer. By offering a wide selection of both products and decorated cake options, we feel that is one of our customer service advantages over the big box guys.”

bakeries and supermarkets in their market are pricing items, “so that we have a general idea on the acceptable price range. “We are looking to get a fair price for the quality products we produce,” she says. “When we need to raise prices because of changes in commodities or speciﬁc

ingredients, we educate our staff and our customers about the reasons for the increases. We have adjusted our prices on speciﬁc items to deal with major spikes in ingredients such as peanuts.” Kretchmar says their general rule of thumb for pricing is four times ingredient cost. When deciding on whether to change prices, they look at the Consumer Price Index and trends in cost of ingredients. “A dip in demand is one of the ﬁrst signals to us that our pricing may be off,” he says. “We do not look at sales

Customer service is the key to higher proﬁts, Murphy says. “Customers will only come back if the service is the best,” he says. “We have some of the best employees in the city. We do everything to enhance their time at our bakery. “

24 < APR 2012 | bakemag.com

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bake - April 2012

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