
In-store bakeries drive loyalty despite thin margins. Professor Russell Zwanka says variety beats shrink control, while Mintel data shows aroma and sampling hook shoppers.
In-store bakeries account for roughly 3% of total store sales, yet they carry an outsized influence on customer loyalty and impulse purchases. The department is labor-intensive, prone to waste, and faces rising ingredient and labor costs. Strict portion control and quick trend adjustments are essential, said Russell Zwanka, a professor of food marketing at Western Michigan University.
June unit sales fell 1.3% year-over-year, according to Circana, a Chicago-based market research firm. Even so, Zwanka said the bakery can enhance a store's reputation and is worth the investment. "Anyone can thaw and sell, it takes artistry and care to operate a great bakery," he said. "Customers recognizing that you offer something special builds loyalty. The in-store bakery is about craftsmanship and distinction."
Bakery selections need eye appeal to attract impulse buyers and those shopping for special occasions. "Operators must remember why customers shop the bakery and work back from there," Zwanka said. "They are usually looking for a special treat, some 'feel good' decadence, or to enjoy life while having less disposable income."
Offering an extensive variety is vital to stand out. "Stores that reduce to 'shrink control' mode will be selling the same boring non-differentiated selections and then price is the only thing that makes them special," he said.
Bakeries can drive incremental sales by pairing signature items with limited-time-only products. Sensory appeal also matters. A 2025 Mintel survey found that 41% of in-store bakery customers are extremely interested in enjoying the aroma of freshly baked goods; 40% are extremely interested in trying in-store sampling; and 35% are extremely interested in enjoying warm offerings such as cookies.
"Blending the convenience and affordability of grocery stores with the charm of traditional bakery aspects can create the perfect recipe for engagement in in-store bakeries," Mintel said.
The sector must also balance indulgence with health trends. Zwanka said selections can have high-quality ingredients and still be indulgent, citing all-natural and organic cherry pies with locally grown cherries. The grab-and-go items – cookies and donuts – will remain top attractions. "Customers still love to treat themselves," Zwanka said.
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