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The Gourmet Cupcake Fad May be Fading

Getty Images, photo by Charley Gallay

It seems the gourmet cupcake fad is dying out after a terrific 10 years of selling elaborate and expensive cupcakes. The high mark of selling gourmet cupcakes hit in June 2011, but since then, the market has been going down.  A cupcake could cost $6 or more and cookies where selling for about $4 but the Crumbs Bake Shop in New York has seen their stock dropping since its peak.

In June 2011, stock for the company was trading at $13 a share, but has fallen dramatically over the past year and a half to $1.70 a share. Crumbs’ officials say part of the blame can be put on Hurricane Sandy, but others say the market is suffering from cupcake burnout as the novelty has run its course. One of Crumbs’ rivals, Cupcake Salon, has seen sales slipping as well and suspects the fad may be waning.

The demand for gourmet cupcakes started in 2000 after they were featured on the HBO show Sex and the City, but in the last quarter, Crumbs lost $700,000 in sales. The problem may not be the cupcakes; it may be there are just too many cupcake stores.

Wsj.com

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