The bakery is an important setting because through it we are able to trace Charlie’s growth in intelligence.
Charlie is a mentally challenged man who gets volunteered for an experimental procedure that will triple his intelligence. He is a good candidate for the procedure because although he is not smart, he is motivated. He works at Donnor's Bakery.
Since Charlie is asked to write progress reports, we can trace both his emotional development and his intellectual growth as the experiment takes effect. His job as a janitor in the bakery is a backdrop both for important events related to his development and the emotional journey he takes.
Comparing different progress report entries that reference the bakery clearly demonstrates this. At first, the bakery is fun and Charlie thinks those who work there are his friends.
Im glad Im going back to werk because I miss my job at the bakery and all my frends and all the fun we have. (March 20)
Later, we see that Charlie has developed intellectually and is able to make a contribution to the bakery that is greater than sweeping the floor.
I figured out a new way to set up the mixing machines in the bakery to speed up production. Mr Donner says he will save labor costs and increase profits. (April 21)
Unfortunately, being a genius is not easy for Charlie. At the same time, he finds losing his genius sad. Charlie can't go back to the bakery because they knew him when he was smart, and once he loses his intelligence he is not willing to face them. However, eventually Charlie loses even that self-awareness and goes to ask for his old job back.