Guffey Archived Articles
Bad News for Bakery: Rising Costs Eat into Profits
As the owner of La Boulangerie Bakery in Baton Rouge, Louisiana, you have a devoted clientele savoring your delicacies. Your salty caramel cupcakes offer an irresistible salty-sweet flavor combination using fleur de sel crystals hand harvested from the pristine seas off Brittany, France. These salt granules complement the sweet buttery caramel that flavors both the cake and frosting. Although your cupcakes are a trendy hit, you also feature delicious cakes, squares, cookies, and breads. Your bakery has a medium-sized storefront; however, most of your business comes from supplying local restaurants and coffee shops with your tantalizing treats. You own two trucks that make deliveries to customers throughout the Baton Rouge metropolitan area.
Although LaBoulangerie is financially successful, rising costs have severely undercut your profits over the past few months. You know that you are not the only business owner dealing with rising prices. Many of your suppliers have raised their prices over the past year. Specifically, the higher price of wheat and sugar has resulted in a drastic increase in your production costs. Previously, you did not charge for deliveries made to your wholesale clients. However, you now feel that you have no choice but to add a delivery charge for each order to cover your increased costs and the rising price of gas.
Your Task. As the owner of La Boulangerie Bakery, write a letter to your wholesale clients in which you announce a $20 charge per delivery. Try to think of a special offer to soften the blow. Address the first letter to Mr. Emil Broussard, Café Broussard, 2013 West Lee Drive, Baton Rouge, LA 70820.
To receive the author’s solution for this newsletter bonus case study, drop a line to Dr. Mary Ellen Guffey (m.e.guffey[at]cox.net ). She will send the solution to your school e-mail address.
Source:Guffey-Loewy, Essentials of Business Communication, 9e, to be released in early 2015.