Your bread sucks

The bread you buy from the supermarket sucks, but then all my German colleagues have been telling me this for ages, rye-chompers that they are…

At the root of the problem is “loss leading”. It works like this. Everyday groceries, such as bread, butter, milk and sugar, are classified as known-value items (KVIs). These are the key purchases whose price shoppers know and by which they judge which shop offers the best value. Most prices are no longer marked on packets but only appear on the shelves, where we notice them briefly. As a result, most of us have little clue what other items cost.

And, of course, the retailers’ losses on KVIs are made good in higher prices elsewhere – on those items we can’t remember the price of. Healthy foods, such as fruit and vegetables and wholemeal bread, tend to have the highest retail margins, whereas loss leaders are often the least healthy purchases – over-refined cereals, highly processed products full of salt, fat and sugar. So loss-leading drives a race to the bottom: it undercuts quality foods and distorts the market in favour of the cheapest and unhealthiest. And it has put most of our traditional bakers out of business.

Ah yes, the joy of free market economies.