Bread makers such as Festive Bread, Superloaf and Broadways have in the recent past lost revenue in a brief price war with in-house bakeries across Kenya’s supermarkets.
The price of bread in the in-store bakeries of supermarkets has been cheaper by an average of Ksh5 since April. This is due to bakers increasing their prices to have consumers bear the additional cost of wheat and ingredients such as cooking oil.
To the consumer’s delight, it is observed that a 400-gram loaf of either Superloaf or Festive Bread is currently retailing at Ksh50 down from Ksh55.
The 600-gram loaf of bread sells at Ksh65 on average down from Ksh70. Multiple 800 grams variants of bread brands have reportedly dropped by over Ksh 5 shillings, coming below the Ksh100 mark.
In two months, external bakers had observed the sudden consumer shift. They have lowered their final prices to keep up with the competition. This is the second time that bakers have been forced to review the price downwards since January 2021.
In January, one tonne of wheat shot up by 30 percent in price from Ksh25,300 to an all-time high of Ksh30,000. Consequently, prices for both bakery and flour supplies experienced a surge.
As a result, the cost of bread in Kenya went up for the first time in four years, significantly disrupting household budgets. At the time milk prices endured an upward shift as well.
Nonetheless, since April, in-house bakeries have neither adjusted their prices upwards nor downwards. However, upward price changes by rivals caused a paradigm shift in their favour.
This is because price-sensitive consumers opted for the cheaper products that would still provide value for money.
According to a survey by Radio Africa, high costs of living tops the list of concerns among Kenyans as 78% of respondents recounted difficulty in servicing basic needs.
“It is evident that the public cannot pay a premium for the bread and this is what has forced bakers to cut their prices because of competition,†narrated Broadways managing director Bimal Shah.
Source: KENYAGIST.COM
