Icing on the cake: a business with a cultural edge

By Sarah Stowe | 30 Nov 2016 View comments

Birthdays, weddings, anniversaries. How The Cheesecake Shop business is driven by celebrations. "The Cheesecake Shop provides an affordable luxury" - Avgerinos. Image: www.foodnetwork.sndimg.com

Cakes and pastries have always been considered treats. Now though there is a taste for healthier items, less sugary confections. So where does this place businesses in that space?

Arna Richardson, IbisWorld senior industry analyst, says “Those producing high value-added cakes or specialty breads who compete on the basis of quality are expected to be less prone to the external competitive pressures welded by supermarkets relative to those industry players competing on the basis of price.

“As such they are expected to experience relatively robust growth, underpinned by strong consumer demand for artisanal breads and high value baked goods.”

Nick Avgerinos, franchise development manager at The Cheesecake Shop says the cultural significance of cakes has benefited the brand.

“Cakes are an affordable luxury with strong cultural support for the celebration of birthdays and other family gatherings.  Growth will come from better meeting the particular needs of consumers in this category than our competitors,” he says.

Cakes account for the largest share of industry revenue with higher-priced special event cakes proving increasingly popular.

Avgerinos believes that that retail conditions in this category are buoyant.

“The Cheesecake Shop provides an affordable luxury and accordingly our sales patterns are remarkably stable.  New products launched over the past year have contributed to a strong competitive position which is considered another positive factor,” he explains.

“Our category generally is mature and stable, reflecting the ‘affordable luxury’ status that cakes provide.

“We see modest growth in the years ahead driven by population and GDP growth and accelerated to some extent by growing consumer demand for the type of quality and bespoke product that The Cheesecake Shop is strong in.”

Interested in The Cheesecake Shop? Find out more about becoming a franchisee.