The Financial Express looks at cupcakes and the economy, specifically Sprinkles Cupcakes:
While the treats cost more than supermarket fare, customers in the wealthy neighborhoods and suburbs where the stores tend to be located compare them to cappuccinos and lattes—affordable luxuries that provide comfort in a slump. “It’s one of those things that don’t follow the cycles of the economy,” said Karl Berta, a Sprinkles customer who works as a trader for a small financial firm in San Francisco. “It’s a lot for a cupcake, but it’s different—it’s new. There haven’t really been stores that specialise in cupcakes before.” As he spoke, Berta stood in a long line outside the Sprinkles in the Silicon Valley town of Palo Alto on October 11—the Saturday after the Dow Jones Industrial Average posted an 18% weekly drop, its biggest ever.
Sprinkles and Kara’s are building on the success of New York cupcake makers such as Magnolia Bakery, which opened in 1996. Unlike Magnolia, popularised by the TV show Sex and the City, the newer chains aren’t full-service bakeries—they just make cupcakes. A variety of single-store cupcake options are also springing up.
About 45% of Americans eat cake at least once every two weeks, said Harry Balzer, a food analyst at NPD Group in Port Washington. So the market is there, he said. The key is keeping buyers loyal after the novelty of cupcake-only stores wears off.
photo by Flickr user eforrest
While the treats cost more than supermarket fare, customers in the wealthy neighborhoods and suburbs where the stores tend to be located compare them to cappuccinos and lattes—affordable luxuries that provide comfort in a slump. “It’s one of those things that don’t follow the cycles of the economy,” said Karl Berta, a Sprinkles customer who works as a trader for a small financial firm in San Francisco. “It’s a lot for a cupcake, but it’s different—it’s new. There haven’t really been stores that specialise in cupcakes before.” As he spoke, Berta stood in a long line outside the Sprinkles in the Silicon Valley town of Palo Alto on October 11—the Saturday after the Dow Jones Industrial Average posted an 18% weekly drop, its biggest ever.
Sprinkles and Kara’s are building on the success of New York cupcake makers such as Magnolia Bakery, which opened in 1996. Unlike Magnolia, popularised by the TV show Sex and the City, the newer chains aren’t full-service bakeries—they just make cupcakes. A variety of single-store cupcake options are also springing up.
About 45% of Americans eat cake at least once every two weeks, said Harry Balzer, a food analyst at NPD Group in Port Washington. So the market is there, he said. The key is keeping buyers loyal after the novelty of cupcake-only stores wears off.
photo by Flickr user eforrest
Comments