Lethbridge Herald, The (Newspaper) - February 5, 1974, Lethbridge, Alberta
2-THE LETHBRIDQE HERALD -TuMday, February If customers stop buying bakers won't make any more Pastry profits sliced thinner Alec Kogler has been a baker for 20 years and has never seen things so bad. Never, he claims, have the price of ingredients been so high and the profit margin on baked goods so low. Mr. Kogler, owner and head baker at North Side Bakery, 610A 13th St. N., starts work at 3 a.m. Trayful of treats baker Alec Kogler displays fresh buns. He finishes at about 3 p.m. but is back for half an hour at 10 p.m. to make the sour dough for rye bread. He doesn't mind working hard if there's some profit in it but says he's not going to be a slave to a loaf of bread. Mr. Kogler's situation is not unique. Three other city bakeries also say its the worst they've ever seen it. They are predicting the end of the small bakery. "There's nothing to look ahead to in the next couple of Mr. Kogler says. Skyrocketing prices in the last six months is what has the bakers up in arms. They all say they're going to have to raise their prices and this is always risky. When you raise your prices you chance losing customers. Here are some price in- creases bakers say they have faced in the last six months: pie filling before 22 cents a pound, now 44 cents a pound; pie filling before 39 cents a pound, now 45 cents a pound; before 55 cents a pound, now a pound; before 34 cents a pound, now 41 cents a pound; before 57 cents a pound, now 88 cents a pound; before 24 cents a pound, now 28 cents a pound: before 16 cents a pound, now 23 cents a pound; seeds before 36 cents a pound, now 75 cents a pound; before 25 cents a dozen (cracked now 45 cents a dozen; 50 cents a dozen (whole now 90 cents a dozen; before five pounds for now five pounds for cents a pound, now 30% cents a pound; products 32 cents a pound, now 50 cents a pound: 29% cents a pound, now 58 cents. Mr. Kogler has stopped making pies. The cost of in- gredients forced their retail price so high he wasn't making any money on them. Service Raymond Wiese, owner and head baker of the Mar- quis Pastry Shop, in the Marquis Hotel, says he makes very little profit on pies They're more of a customer service. On an eight-inch 75-cent apple pie he makes 15 cents profit and sells about six a day. He's going to raise his prices on pies and if people stop buying them he won't make them any more. Don Nilsson, owner and head baker at Nilsson's Pie Shop, 1708 Mayor Magrath Drive, says he used to make more on a pecan pie that sold for than he now makes selling it for Emil Scheirman, head baker at Ericksen's Drive- in Pastry Shop, also says he makes very little on a pie. Most of the pies Mr. Scheirman makes go to Ericksen's Family Restaurant and he keeps a few for customers. It isn't that important he sell a lot of pies over the counter. Because the price of raisins has doubled in the last six months, Mr. Wiese and Mr. Kogler says there is very little profit in any products made with raisins. Items like cinnamon buns are just a service to the customer. They make them hoping customers will buy something else when they purchase the buns. Mr. Scheirman does not agree. He says the amount of raisins used for a dozen cinnamon buns is so small that it doesn't affect the price and there is still a good profit in cinnamon buns. Fen Tunbridge, manager of McGavin Toastmaster Ltd., of Lethbridge says he's not that concerned about the rise in prices of ingredients of baked goods because baked goods are such a small percentage of McGavin's sales. Most of its baked goods are brought in from Calgary. Mr. Tunbridge says there hasn't been an increase in the price of these products for some tune. He says McGavins makes mostly buns and breads and is more con- cerned with their prices than the prices of baked goods. What is all this going to lead to? Some bakers are going to raise their prices anywhere from 12 to 25 per cent. Others are predicting the end of small bakeries. Mr. Kogler says the little guy is going to quit. He doesn't know how some are managing right now. He says he'll try and hang on for the next couple of years. Income drop Mr. Wiese says his in- come has gone down 18 per cent in the last year. He says prices will rise anywhere from 12 to 20 per cent. He hopes the increases won't send his customers to the grocery stores to buy baked products of inferior quality. He also hopes something will happen to level things out something like government price controls. Mr. Nilsson says his prices could go up as much as 25 per cent. It has to be done to keep the doors open, he says. "I'm better off to sell less pies if I can't make any profit on the he says. Mr. Nilsson says he hires help to work in the front end of the shop waiting on customers. There is no way he could hire anybody to do the baking that he and his wife do for the wages they pay themselves. "If we don't raise prices we'll go out of he says. Things will be very difficult if customers don't go along with price increases. JVo stockpile Mr. Nilsson pointed he cannot stockpile in- gredients when they are at low prices because a baker can only use so much in one day. If items were stockpil- ed some of them would go bad. Mr. Nilsson says there's no ray of hope. The shor- tage of things is world wide and it's getting people down. Mr. Scheirman says his prices definitely have to go up but he wasn't sure how much. He says if there is strong customer resistance to price increases the small bakeries are going to be in trouble.