Retail volume sales in nearly all segments of baked goods are declined in the early months of 2020 as a result of the COVID-19 pandemic. Access to baked goods was limited by various pandemic-related restrictions, including curtailment of gatherings by consumers in markets; restrictions on movement, with a significant proportion of Tunisians avoiding commuting and working from home when they could; and reduced access—although not a ban—to bakeries and grocery retailers.
Prior to the pandemic, consumers purchased far more unpackaged leavened bread from artisanal bakeries than packaged leavened bread from supermarkets and other modern grocery retailers. This tradition continues in 2020, although volume sales of unpackaged leavened bread are declining sharply.
Mainly due to the widespread popularity of unpackaged leavened bread, artisanal bakeries continue to lead the baked goods category in value share in 2020. Unpackaged bread prices are fixed by the authorities in Tunisia and, in turn, unpackaged bread, especially unpackaged baguettes, remains an affordable choice for nearly all Tunisian consumers.
For the most part, baked goods are expected to remain popular amongst consumers in coming years. Demand will remain relatively steady, but retail value sales in several segments at constant 2020 prices are nonetheless expected to decline slightly in the early years of the forecast period before eventually posting growth, albeit marginal, in the later years of the forecast period.
Despite increasing price-sensitivity, consumers are likely to be willing to pay a bit more for bread from modern grocers over the forecast period, particularly packaged bread that is likely to have a greater shelf life and, in turn, provide greater value. But while growing demand for packaged leavened bread will bolster the distribution performance of supermarkets and others in the modern grocery channel, artisanal bakers will not be displaced.
The heightened price-sensitivity brought about by pandemic-era economic uncertainty and concerns about rising unemployment is expected to keep affordability in the forefront of consumers’ minds over the forecast period. For example, if the price of packaged cakes increases, many price-conscious consumers will simply shift to less-expensive unpackaged cakes which can be purchased at traditional bakeries and which are often offered in family-sized packages.
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This report originates from Passport, our Baked Goods research and analysis database.
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