Stuck between skyrocketing energy bills and customers whose purchasing power is diminishing, many bakers fear going bankrupt.
“A little dessert today? No? I would have tried…” Benoît Vidal’s cash register shows 1.15 euros, the price of a baguette. This is the only purchase this customer has made today. Not enough to replenish the coffers of the Maison Vidal bakery, located in Tours (Indre-et-Loire). His boss, a baker and pastry chef, moved in with his partner in November 2020, when their daughter was born. Today, while his business is being undermined by inflation, he regrets this choice. And Benoît Vidal is far from being the only one in his situation. Franceinfo went to meet these bakers who are struggling due to inflation.
Laetitia Escuder is one of them. With her husband, they opened their bakery in Bourg-en-Bresse (Ain) in October 2020. She is an accountant by training, he, a baker, who dreamed of setting up his own business. But the dream turned into a nightmare when the bills started piling up. To the point where the couple fears being forced to close their business within a few months.
“Our gas contract ended on October 31. The new contract that Engie is offering us is far too expensive”, laments Laetitia Escuder, supporting invoices. In 2020, the price per kilowatt hour of gas that Engie offered them, for a period of three years, was 1.6 cents. The new contract offered to him by the supplier now amounts to 6.2 cents. For the boss, it is impossible to assume such charges. “We are trying to hold on until Christmas, but then I know that it will surely lead to a cessation of activity”, she believes, resigned. The couple hopes to resell the business, but have no illusions. “We are also poorly located. We are between two Marie Blachère (a chain of bakeries) and a Crossroads…explains Laetitia Escuder. We’re going to go out of business if it continues like this.”
So to try to save their business, she and her husband changed the way they worked.
“We close one more day in the week to turn on the oven one less time. We have increased our prices by 10 cents.”Laetitia Escuder, baker in Bourg-en-Bresse
But given the amount of invoices, this is not enough, recognizes the trader. Especially since this small increase has already caused it to lose customers. “If we applied the same increases to our prices as those we saw on our invoices, we would already be closed”she whispers. “We can clearly see that our customers have less purchasing power. The little pleasure, the little pastry with a baguette, for 95% of our customers, is over.” Unable to increase prices, and unable to reduce their bills, the couple can no longer pay themselves a salary and live on their personal savings. “We have three children who are between 7 and 16 years old, we cannot continue like this. We just hope to get out of this activity without leaving too many feathers.”
In Tours, in Benoît Vidal’s bakery, same story. “Just for an increase of five cents, we see people going elsewhere”enrages the baker-pastry chef. “We are taking the inflation crisis head on”, he relates, while according to him, his gas bills have doubled in two years. Result, “We almost have no cash left. We’ve been in the negative on our professional account for six months, six months since we haven’t paid ourselves a salary.” With the increase in the price of gas, but also of raw materials, its margins have also been reduced considerably.
“More and more often, there are days when we work at a loss.”Benoit Vidal
Co-manager of the Maison Vidal bakery, in Tours
To limit the damage, he too tries to adapt. The baker prefers to underproduce, even if it means running out of croissants at 10 a.m. “We have to be careful about what we produce so as not to have unsold items at the end of the day. Sometimes people are not happy. They leave bad Google comments…”he slips, disillusioned.
Stress, tension, fatigue…
This bad mood and the difficulties linked to the bakery are not without consequences on the personal life of the Vidal couple. “We are stressed, so obviously we argue more often”recognizes the baker, who regrets having set up his own business in France. “We’re going to pay off our credit and we’re going to move abroad, it pays a lot better. Only four years left.” A stress shared by many other bakery owners.
“It’s true that I’m having a little more trouble sleeping lately“entrusts Francis Gros, owner of three bakeries in Aix-en-Provence. “We have a dwindling cash flow. If it continues like this, I will have to sell an establishmenthe regrets. It’s the opposite of the entrepreneurial spirit that drives me, it’s demoralizing.” This daily stress faced to inflation also puts a strain on relationships with customers and within the company. “As the economic situation is complicated, we are more tense. It even creates tensions within the company. We try to manage it as best we can”, he explains. With customers, “oThey immediately get comments when they see that we have increased our prices.”relates the baker. “We have more and more thefts. And not just young people… It hurts my heart to see that.”
“I’m not going to throw myself off a bridge right away, I’m determined, but it’s true that it’s stressful.”Francis Gros
Owner of the Goût de Pain bakeries, in Aix-en Provence
But the entrepreneur does not let himself be discouraged and seeks solutions from all sides. “We work during off-peak hours at night to save on energy. But at night, labor costs me more. In the end, we save on one side to spend on the other, it’s a puzzle.” And then, “to limit losses on sandwiches, etc., we work with Too Good to Go”an application that fights against food waste. To save energy, Francis Gros even imagined installing photovoltaic panels on one of his establishments. “But hey, given the investment that it requires, it’s impossible. We don’t have the cash, and for a loan, it’s not even worth it. At the moment, the bankers are very cautious with us “, he regrets.
This dwindling cash flow is a real vicious circle, to the point that the lack of money to invest risks limiting the baker in his production. “In Aix, we have a specialty, it’s olive oil pump (a Provençal dessert made for Christmas Eve). Last year, a liter of oil was 5.80 euros. This year, it is 10, even 11 euros. At this price, II’m not going to be able to buy as much oil as last year, I don’t have the cash. So, we are going to produce fewer pumps, we are going to increase prices, and we are going to sell fewer, with less margin.”laments Francis Gros, who still hopes to succeed in replenishing his cash flow somewhat during the holiday period.
Collective initiatives to try to limit damage
In Manche, faced with these difficulties, the nine bakeries in Coutances have chosen to coordinate. Since September 1, all bakeries in the city have closed two days a week, on a rotating basis. With this initiative, Jean-Michel Bellamy, owner of the bakery Au chant du Pain hopes to restore the attractiveness of the profession and better cope with increases in energy prices. “Last February, my electricity bills were multiplied by two, which really screwed us up cash-wise.”, he remembers. Indeed, Jean-Michel Bellamy’s bakery was not able to benefit from the price shield put in place by the government. This system, which limits the increase in electricity prices to 15%, implemented in 2021 for individuals, has been accessible to VSEs since January 2023, but subject to having an electric meter with a power of less than 36 kilovolt-amperes. Bakeries that have an electric oven that consumes a lot of energy are thus left in the lurch.
Despite this, the Au chant du pain bakery is holding up, believes its boss. “We increased the prices of our products by 5 to 10% and reduced our margins.”he explains. “It’s okay because I’m well established, but it’s certain that the shops which are doing poorly cannot cope, they go out of business. That’s sorting it out”, he admits. On their own, bakeries have little leverage in negotiating their energy contract, and those with the most precarious cash flow risk going bankrupt. To avoid this, in Ile-de-France, the Grand Paris bakers’ union found a service provider and negotiated with them in order to obtain better prices for its members. Arnaud Delmontel, owner of three bakeries in Paris, is in the process of switching to this new service provider. “My bill will drop a little and, above all, I will gain stability”he rejoices as the holidays approach.