Why are bagels sold at the grocery store only partially sliced?
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Why are bagels sold at the grocery store only partially sliced?
This is just one of the stories from our “I’ve Always Wondered” series, where we tackle all of your questions about the world of business, no matter how big or small. Ever wondered if recycling is worth it? Or how store brands stack up against name brands? Check out more from the series here.
Jim Shaw asks:
I’ve always wondered why bagels are not split all the way through.
If you’ve ever bought a package of bagels from the grocery store, you may have noticed that they’re not sliced all the way through.
Roger Beahm, a marketing professor at Wake Forest University School of Business, said there are multiple advantages to this practice. It’s convenient for consumers, it ensures that the bagels stay fresh and it keeps the bagel intact.
“Partially slicing still allows the bagel to retain more of its freshness than if it were sliced completely through. With less of the bagel’s interior surface exposed, the inside freshness can remain longer, especially once the package has been opened,” he explained.
And if the bagel were split up, the two halves of the bagel would be separated on the conveyor belt or slide, ruining the integrity of the bagel, Beahm added.
As for why food companies don’t decide to just keep them whole, Beahm pointed out that slicing a bagel at home may be a challenge for some people.
“Partially slicing the packaged bagels is a convenience that often goes unappreciated,” he said.
So there are several practical, understandable reasons behind this decision. But some people have also raised the possibility that tax laws might also be a factor in the decision to do partial slices. Does this idea have any credence?
Food tax law is complicated
In New York, sliced bagels sold at bakeries and bagel shops face a sales tax, while whole bagels don’t.
Back in 2010, the Wall Street Journal reported that New York state told bagel-store owner Kenneth Greene he had to start charging taxes on bagels “except for those that remain intact and are consumed off premises.” This amounted to about an extra 8 cents per bagel.
While this law was already on the books, tax officials began to enforce it after orders from the state’s capital, which was in need of cash.
Green told the Journal that customers “felt we were nickel-and-diming them. They thought we were charging them to slice a bagel.”
Bill Loew, executive vice president of Miles Consulting Group, a consulting firm that helps businesses with state tax issues, said sales taxes are specific to the state, and sometimes even to a city or local jurisdiction. The way food is prepared can affect how it gets categorized under each state’s tax laws. The rules that business have to follow gets complicated to keep track of, which is why Loew said he’s still employed.
Loew explained that in California, for example, a heated rotisserie chicken is taxable, while a whole raw chicken in the refrigerated section is not.
While Green found himself in a fraught situation, the idea that taxes are another reason why nationwide food companies decide to partially slice packaged bagels doesn’t hold up.
Loew explained that in New York, bagels are not subject to sales tax when they’re sold in bulk or in a package.
“It doesn’t matter if they’re whole or sliced in that package, they’re going to be exempt,” he said.
Loew said it’s different at a bagel shop because the business is selling a prepared item, and if it gets sliced, that technically counts as a form of preparation.
Loew thinks the reason this tax law might be in place in this instance is because of the extra work involved.
“By cutting that bagel in half, you change the form of it. By adding that labor to the item, you’ve added value to that item,” he said.
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