According to market research group Plimdoll, smaller companies are increasing sales at three times the rate of larger competitors, delivering profitability that is four times as high and showing five times the rate of return on investments when compared to large companies operating in the bakery sector.
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Price deflation has hit the profit margins of larger groups, Plimsoll said in a report analysing the top 100 bakery companies. Of the top 100 bakery groups, 21 are losing money, while 46 are making less profit than last year. In the top 100 companies salaries eat up 26% of sales.
Plimsoll’s senior analyst, David Pattison, said: “21 of the bigger companies are displaying symptoms of extreme tiredness. But the big companies are desperate not to miss out on the new profit and growth areas, so they are busy hunting down the emerging firms.”
