For at least a decade, supermarket operators have turned increasingly to fresh foods for the strategic direction of their business by remodeling existing stores and building new stores to feature and emphasize produce, the delicatessen, the bakery, and other perishable departments. These departments have been the fastest growing and offer the greatest future sales potential as consumer demand for "fresh" and "ready to eat" prepared foods continues to grow. Despite these prospects, little is actually known about how consumers perceive and respond to product offerings and retailer initiatives in perishable departments. The objective ofthis report is to shed light on consumer attitudes and behavior with respect to one of the major supermarket perishable departments: the bakery. This report is based on a study which incorporated both primary and secondary sources of data (details in Section II). The primary data were collected through consumer surveys conducted nationwide by telephone and in-person at supermarkets in several regional market areas. A total of 700 consumers were surveyed. Additional primary data and insights were gathered through personal interviews with key supermarket bakery executives. Secondary data were gathered from trade reports, academic journals, and previously published research. The empirical results and analyses presented in Section III include such key findings as: • consumers consider convenience the most important reason for shopping supermarket bakeries, • the main reason some consumers do not buy baked goods in supermarkets is "freshness," which is perceived to be better at local bakeries, • consumer awareness of health and nutrition concerns is greater than consumer knowledge about these issues, • about half of consumers are familiar with the United States Department of Agriculture's Food Guide Pyramid, but the percentage varies greatly by age with the youngest shoppers being most familiar, • consumers rate many of the most popular retailer promotional efforts as uninfluential factors in their purchase decisions, and • price plays only a minor role in bakery purchase decisions for most consumers. The implications of these findings and others are discussed in Section IV which also discusses opportunities for the supermarket bakery industry to respond to the consumer characteristics and issues identified in this study. The results present many marketing challenges for supermarket bakery managers as consumers increasingly make bakery decisions based on knowledge of health, nutrition, and other issues.