Why does the kiddush precede the blessing on the bread?

The Torah commands us,1 "Remember the Shabbat day to keep it holy." We fulfill this commandment by verbally declaring Shabbat's holiness when it starts – the Friday night kiddush – and as it departs—the havdalah. The sages instituted that we recite this sanctification over a cup of wine. See What is Judaism's take on alcohol consumption? for a discussion regarding wine's special qualities.

Because kiddush's objective is to sanctify Shabbat as it enters, we recite it as near as possible to Shabbat's beginning, before partaking of the bread, or challah, which serves as the beginning of the Shabbat meal. Furthermore, by first sanctifying the Shabbat and then breaking bread we are indicating that the entire meal is an extension of the kiddush—that the intention of the sumptuous meal is only to confer honor on the holy Shabbat.

During the rest of the week, however, we start our meals with bread – even if wine will be drunk during the course of the meal – because bread is "the staff of life," the centerpiece of the human diet.

Rabbi Eliezer Posner