AIRY croissants, rich chocolate-chip biscuits, wedges of succulent cake—the goods at the City Bakery, in Manhattan, look delicious. Maury Rubin, its founder, studied in France. But his best creations are distinctly American: pretzel croissants (surprisingly tasty), and recipes for making money.
Mr Rubin is among those bakers who revere traditional methods but want a fat profit. However, a good bakery is bad business. Flour is cheap but organic butter, which makes up half a croissant, is not. Central locations for outlets are expensive to rent. In all, it costs Mr Rubin $2.60 to make a $3.50 croissant. If he makes 100 and sells 70, he earns $245 but his costs are $260. Since he refuses to sell leftovers—all goods are sold within a day—he loses money. “Welcome to the bakery business,” Mr Rubin says.
The obvious fix is to raise prices. But Mr Rubin says shoppers bristle when the cost of baked goods passes a certain threshold. He has two main solutions. First, don’t be just a bakery. He also sells fancy salads and sandwiches to office workers, which have higher margins.
Second, use data to cut waste. Mr Rubin studies sales to discern trends in demand, then adjusts supply accordingly. There are no brownies or carrot cake on Mondays or Tuesdays—people don’t buy rich desserts after decadent weekends. He watches the weather closely, as demand melts in...
from The Economist: Business http://ift.tt/1KQibwh
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