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Bakeries rise as everyday luxury in global high-price era

Published: 21 Aug. 2025, 00:06

Choi Sun-wha

The author is a professor of international business at Dongduk Women’s University.

Recently, the city of Daejeon published “Bread Walk in Daejeon,” a guidebook introducing more than 100 local bakeries — including the famed Sung Sim Dang — mapped out as walking courses. The aim was to cement the city’s identity as the “bread capital” of Korea, while drawing visitors and boosting the local economy.

People queue to buy desserts at the 2025 Cafe & Bakery Fair in Gangnam District, southern Seoul, on Feb. 19. [YONHAP]

The trend of “bakery pilgrimages,” where travelers line up from dawn to sample local favorites, has spread quickly through media and social networks. According to Tmap Mobility, four bakeries were included in the top 10 dining destinations of the summer holiday season in 2024, compared to just one in 2022.

It is not just a Korean phenomenon. Around the world, self-styled “pastry pilgrims” now seek out acclaimed bakeries and dessert cafés. The so-called “bakery tour” has become a travel trend in its own right. Global consultancy Grand View Research projects that the bakery market will expand from $500 billion in 2024 to $700 billion by 2030, with artisan bakeries growing at an annual rate of 4.8 percent through 2032.

Customers wait in line to buy bread at Sungsimdang in Daejeon on Oct. 22, 2024. [JOONGANG ILBO]

The 'lipstick effect' moves from fashion to food

Analysts trace the bakery boom to multiple factors, but a key driver is the “lipstick effect” in today’s era of high inflation. The term describes how, during downturns, consumers indulge in small luxuries — like lipstick — when larger purchases are out of reach.

Food inflation has been particularly steep since the pandemic. In July, Korea’s dining-out price index was up 25 percent from 2020, far outpacing overall inflation of 16 percent. Globally, “lunchflation” — coined in the United States in 2022 to capture the rising cost of midday meals — has since entered everyday vocabulary.

As eating out becomes harder to afford, many consumers turn to bakeries, which offer affordable convenience while still satisfying culinary desires with premium or novel pastries. Instead of a supermarket croissant for 1 euro, people opt for a 5 euro croissant at a celebrated bakery. In Korea and the United States, a pistachio cream–filled chocolate from Dubai recently sparked a buying frenzy, selling out within days.

A Deloitte survey of 23 countries confirms that small luxury spending has shifted from fashion and cosmetics into food and beverage, with the average outlay per indulgence at just over $10. While fine dining may feel extravagant, customers readily spend on signature items from a renowned bakery. Sensory pleasures — the aroma of bread, the crunch of a crust the softness of a pastry — also serve as mood boosters. Research by Amalia Scannell of University College Dublin found that 89 percent of consumers felt uplifted by the smell of baking bread, while 63 percent recalled happy moments.

A strawberry-themed dessert course at Grand InterContinental Seoul Parnas in Gangnam District, southern Seoul [GRAND INTERCONTINENTAL SEOUL PARNAS]

Bakeries as cultural landmarks

Bakeries are no longer just places to buy food — they have become cultural and social spaces. From small alley cafés to sprawling complexes on city outskirts, many now feature striking architecture. This year, three bakery cafés designed by Busan-based architect Ko Seong-ho won the World Architecture Awards for reviving local identity. In Jeju, the Glass House, designed by famed Japanese architect Tadao Ando, was recently repurposed as a bakery café, drawing a steady stream of visitors.

For older generations, bakeries have become essential spaces for casual meals and socializing. Shinhan Card data show that among customers over 60, bakery visits rose 30 percent between 2022 and 2024, with the top 20 percent of spenders leading the surge.

The products themselves are also diversifying. Premium ingredients and health-conscious recipes are increasingly common, alongside playful shapes and imaginative desserts. Shinsegae Department Store now operates Sweet Park, a dessert hall showcasing international brands such as Pierre Marcolini chocolates, Mille et Un tartes from France and Gariguette mille-feuille from Japan. Travel platforms, too, are capitalizing: GetYourGuide offers Paris pastry tours, croissant-baking classes and London afternoon tea bus tours.

Why luxury brands are joining the café boom

The bakery craze is often framed as a response to inflation, but at heart it reflects a universal desire for pleasant spaces, good food and merriment. Cafés and bakeries serve as “third places,” or spaces where people gather aside from their home and workplace, making them valuable touchpoints for companies seeking to engage consumers.

That explains why luxury brands are moving into hospitality. Louis Vuitton, Gucci and Dior have opened cafés and restaurants in major global cities. Valentino recently partnered with Korean brand Butterful & Creamorous for a pop-up in Shanghai. In New York, Genesis House uses Korean food and tea to showcase its brand identity. Tesla has gone further, opening the Tesla Diner last month — a hybrid space for EV charging, movie-watching and casual meals — to underline its futuristic image.

Le Cafe Louis Vuitton in Seoul [JOONGANG ILBO]

Still, the boom comes with challenges. Rising bread prices have raised consumer concerns, and some large bakeries face criticism for tax-related practices. With competition intensifying as more entrepreneurs enter the market, success will depend less on viral exposure and more on building loyal customers.

For businesses beyond food, the lesson is clear: Consumers crave everyday spaces where brand experiences feel natural, not forced. A croissant, a loaf of bread or a slice of cake paired with an inviting atmosphere remains one of the few luxuries technology cannot replicate.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.