McArthur’s Bakery will close two of its three retail locations at the end of this month, leaving the Lemay Ferry Road location in South County as the bakery’s sole brick-and-mortar outlet. The 62-year-old brand will focus on online orders and deliveries.
Owner Scott Rinaberger says the decision to close the locations in Chesterfield Valley and Kirkwood would allow the bakery to develop its online ordering business and reach new markets.
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“The question was, ‘Over the next five years, do we want to jump ahead and be the market leader in terms of the bakery of the future?’” he says. “‘Or do we want to continue with the traditional model?’”
For McArthur’s, the future lies in giving customers the ability to place orders for custom cakes online, without having to call or visit a store. “The big thing is being the first to market where you can order one of a couple of hundred—soon, a couple of thousand—pre-designed cakes,” says Rinaberger. “And if you don’t like those, you can still call and have your cake custom-designed.”
To realize this goal, Rinaberger and his team have spent the past year developing an online ordering system for custom cakes. The platform is slated to launch in the next few weeks. The aim is to streamline the ordering process as much as possible: “Pick your dough, pick your filling, write your inscription,” as Rinaberger puts it.
The closures represent a significant change of course for McArthur’s. When Rinaberger bought the bakery from Randy McArthur in 2014, McArthur’s had three existing branches. At the time, Rinaberger says, “The question was, ‘What are other bakeries that have been around for 40 or 50 years doing to stay relevant?’” He saw bakeries in other cities reinventing themselves as fast-casual café concepts, with a more rounded food selection. “We went heavy on that,” he recalls. With former Panera manager Ben Abel hired as executive director of food, McArthur’s added two new locations.
Having reached that peak of five branches, McArthur’s has retreated from retail commitments over the past two years, scaling down to a single retail outlet. A branch in the Delmar Loop closed in October 2017, followed by the closure of the Chesterfield location on Olive last January.
Rinaberger says the traditional retail-based model is labor-intensive and inefficient. “We run our bakery for about 20 hours a day at present,” he explains. “The first baker shows up at about 3 a.m., and the last baker leaves at around 11 p.m. That’s a lot of stress on the bakery.” As the development of the online ordering platform progressed, Rinaberger began to consider the sustainability of maintaining three retail stores.
Closing the Chesterfield Valley and Kirkwood stores alleviates some of that stress. Some of the staff from those stores will join the Lemay Ferry operation (pictured above) as McArthur’s builds out its in-house delivery operation. The bakery uses Grubhub and DoorDash to deliver non-bakery food items, but it has already been operating its own delivery service for cakes for a few years.
“Logistically, it’s not overly complicated,” Rinaberger says. “Online ordering and delivery is bake-to-order. I call retail baking ‘bake-to-wait’—we bake it, then we wait for somebody to show up and buy it.” Noting the cost and inefficiency of the ‘bake-to-wait’ model, Rinaberger is confident that baking to order will be more profitable in the long-term for smaller boutique bakeries.
McArthur’s business has also been transformed by the growth of its wholesale trade, says Rinaberger. When he first bought the business, retail sales at the three locations accounted for around 90 percent of the bakery’s business. In the 18 months following the purchase, however, “we started getting a lot more interest in wholesale,” says Rinaberger. “Aldi reached out to us and wanted to introduce our Gooey Butter Cake to their stores in the St. Louis market and the Midwest. Then Save-A-Lot came along, and wholesale started taking on a much more meaningful role in the business.”
Partnerships with such companies as Aramark, Sodexo, and Guckenheimer, who provide food services for some of St. Louis’ largest corporations, demanded an increasing share of resources and time as well. “Retail went from being 90 percent of our business to about 60 to 65 percent, but it was taking up about 80 to 90 percent of our time,” says Rinaberger.
McArthur’s could have added more retail locations, he says, but he believes that cutting back on brick-and-mortar to capture the market for online orders makes more sense in preparing for the future.
Rinaberger makes an important distinction, though: He dismisses the notion that the rise of delivery spells the demise of brick-and-mortar stores. “Brick and mortar is extremely important; I just don’t think it needs to be multiple locations anymore,” he says. “I think it’s a balance between the two. People still love the bakery experience. They enjoy coming in and taking in the baking smells.“
The last day of business for the Chesterfield Valley and Kirkwood locations will be Thursday, January 31. The remaining location on Lemay Ferry Road will remain the bakery’s physical hub. McArthur’s will deliver anywhere within a 30-mile radius from the location—“all the way to Wentzville, Alton, Hazelwood, and Waterloo and Columbia, Illinois”—with no delivery fees on party cakes.
