Raw Material Costs Soar, Leading to "No Profit" for Western-Style Confectionery Shops; Bankruptcies Surge 1.3 Times Year-on-Year, 60% Face "Deteriorating Performance"; Even Famous Shops Struggle
In FY2025, bankruptcies of Western-style confectionery shops reached a record high for the second consecutive year, with 65 cases, a 1.3-fold increase from the previous year, due to soaring raw material costs and intensified competition with convenience store sweets. Approximately 60% of shops face deteriorating performance, with smaller, local stores particularly struggling.
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- 📰 Published: May 2, 2026 at 16:00
- 🔍 Collected: May 2, 2026 at 07:31
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Teikoku Databank, Ltd. conducted a survey and analysis of the bankruptcy situation of "Western-style confectionery shops."
SUMMARY
The number of bankruptcies among "Western-style confectionery shops" in FY2025 reached 65 cases, marking a record high for the second consecutive year. Due to the rapid rise in prices, material costs have soared. Meanwhile, the emergence of convenience store sweets, which rival specialty stores, has intensified price and acquisition competition, especially in the mid-price range of around 400-600 yen. The struggle is particularly evident for "affordable neighborhood cake shops" finding it difficult to raise prices.
Aggregation period: April 1, 2000 to March 31, 2025
Target for aggregation: Bankruptcies with liabilities of 10 million yen or more, due to legal liquidation.
"No Profit" Due to Soaring Raw Material Costs; Western-Style Confectionery Shop Bankruptcies Surge 1.3 Times Year-on-Year
The number of bankruptcies among "Western-style confectionery shops" (with liabilities of 10 million yen or more, due to legal liquidation) in FY2025 reached 65 cases. This represents a 14-case, or approximately 30%, increase from the previous year's 51 cases, which were already rapidly increasing due to inflation, marking a record high for the second consecutive year. Due to the rapid rise in prices, material costs have soared. Meanwhile, the emergence of convenience store sweets, which rival specialty stores, has intensified price and acquisition competition, especially in the mid-price range of around 400-600 yen. The struggle is particularly evident for "affordable neighborhood cake shops" finding it difficult to raise prices.
In addition to flour, dairy products such as butter and cream, and cacao, all raw material prices have remained at record high levels. Furthermore, increases in packaging materials, labor costs, and utility costs have further compounded the issue, leading to a sharp decline in the profitability of Western-style confectionery shops. On the other hand, a growing frugality among consumers, coupled with the entry of convenience store sweets into the mid-to-high price range previously dominated by local confectionery shops, and competition from large confectionery chains expanding their stores, have all contributed to the pressure. As a result, many shops faced a "dilemma," unable to reflect rising costs in their prices for fear of losing customers. This led to many mid-sized confectionery shops operating multiple stores in a region being eliminated because they could not secure profits. Grand Dolce (Chiba), which operated seven stores including those in shopping centers, was forced to abandon its business due to unbearable soaring raw material and labor costs. Shiratori Kashikobo (Saitama), popular as a famous French confectionery shop, also found it difficult to continue operations as soaring raw material prices exacerbated its already low profitability.
Looking at the management trends of Western-style confectionery shops, this severe business environment is clear. The operating profit margin for confectionery shops in FY2025 averaged 0.7%, worsening from the previous year and reaching its lowest level since FY2022, when food and other prices sharply increased. Furthermore, over 30% of shops reported final losses, and nearly 60% were categorized as "worsening performance," including those with reduced profits. Some cases revealed a vicious cycle: shops opted not to raise prices for fear of losing customers, leading to a decline in gross profit margins. Others responded with "de facto price increases" by reducing product sizes, which in turn led to decreased customer satisfaction. This highlights the difficult management decisions shops were forced to make.
Popular shops that have acquired unique brand power and support for quality have managed to maintain and expand their profit levels by "convincing" customers of price increases dueu to soaring raw material costs. They also utilize SNS like Instagram and implement fully reservation-based cake sales to eliminate waste. However, only a limited number of confectionery shops can implement such initiatives. Many are forced to manage with little leeway (room to maneuver) in a fiercely competitive environment, and with raw material prices such as cacao expected to continue rising, the business environment remains tough. It is anticipated that confectionery shops unable to secure profits will continue to be eliminated at a high rate.
SUMMARY
The number of bankruptcies among "Western-style confectionery shops" in FY2025 reached 65 cases, marking a record high for the second consecutive year. Due to the rapid rise in prices, material costs have soared. Meanwhile, the emergence of convenience store sweets, which rival specialty stores, has intensified price and acquisition competition, especially in the mid-price range of around 400-600 yen. The struggle is particularly evident for "affordable neighborhood cake shops" finding it difficult to raise prices.
Aggregation period: April 1, 2000 to March 31, 2025
Target for aggregation: Bankruptcies with liabilities of 10 million yen or more, due to legal liquidation.
"No Profit" Due to Soaring Raw Material Costs; Western-Style Confectionery Shop Bankruptcies Surge 1.3 Times Year-on-Year
The number of bankruptcies among "Western-style confectionery shops" (with liabilities of 10 million yen or more, due to legal liquidation) in FY2025 reached 65 cases. This represents a 14-case, or approximately 30%, increase from the previous year's 51 cases, which were already rapidly increasing due to inflation, marking a record high for the second consecutive year. Due to the rapid rise in prices, material costs have soared. Meanwhile, the emergence of convenience store sweets, which rival specialty stores, has intensified price and acquisition competition, especially in the mid-price range of around 400-600 yen. The struggle is particularly evident for "affordable neighborhood cake shops" finding it difficult to raise prices.
In addition to flour, dairy products such as butter and cream, and cacao, all raw material prices have remained at record high levels. Furthermore, increases in packaging materials, labor costs, and utility costs have further compounded the issue, leading to a sharp decline in the profitability of Western-style confectionery shops. On the other hand, a growing frugality among consumers, coupled with the entry of convenience store sweets into the mid-to-high price range previously dominated by local confectionery shops, and competition from large confectionery chains expanding their stores, have all contributed to the pressure. As a result, many shops faced a "dilemma," unable to reflect rising costs in their prices for fear of losing customers. This led to many mid-sized confectionery shops operating multiple stores in a region being eliminated because they could not secure profits. Grand Dolce (Chiba), which operated seven stores including those in shopping centers, was forced to abandon its business due to unbearable soaring raw material and labor costs. Shiratori Kashikobo (Saitama), popular as a famous French confectionery shop, also found it difficult to continue operations as soaring raw material prices exacerbated its already low profitability.
Looking at the management trends of Western-style confectionery shops, this severe business environment is clear. The operating profit margin for confectionery shops in FY2025 averaged 0.7%, worsening from the previous year and reaching its lowest level since FY2022, when food and other prices sharply increased. Furthermore, over 30% of shops reported final losses, and nearly 60% were categorized as "worsening performance," including those with reduced profits. Some cases revealed a vicious cycle: shops opted not to raise prices for fear of losing customers, leading to a decline in gross profit margins. Others responded with "de facto price increases" by reducing product sizes, which in turn led to decreased customer satisfaction. This highlights the difficult management decisions shops were forced to make.
Popular shops that have acquired unique brand power and support for quality have managed to maintain and expand their profit levels by "convincing" customers of price increases dueu to soaring raw material costs. They also utilize SNS like Instagram and implement fully reservation-based cake sales to eliminate waste. However, only a limited number of confectionery shops can implement such initiatives. Many are forced to manage with little leeway (room to maneuver) in a fiercely competitive environment, and with raw material prices such as cacao expected to continue rising, the business environment remains tough. It is anticipated that confectionery shops unable to secure profits will continue to be eliminated at a high rate.