Summary of Key Points
In the past year, nearly 90,000 bakeries have closed, entering a state of intense competition. The main reasons are the diversion of consumers to new tea brands and supermarkets, as well as increased costs for raw materials and operations, leading to internal strife within the industry. There are two competitive strategies: low-price tactics to attract customers (such as 2-yuan bread, which fails to retain them due to poor quality) and high-price strategies to focus on value (such as 30-yuan whole wheat toast, which performs well due to its perceived value and targeted customer base). However, the key to survival in both cases lies in systematic capabilities such as product quality, supply chain management, and refined operations. Market demand is actually segmented and long-term; it depends on whether bakeries can accurately meet these needs.
Why Have Nearly 90,000 Bakeries Closed in One Year?
Bakeries are facing difficulties mainly due to two issues:
First, consumers are being attracted to other options. In the past, people had to go to specialized bakeries for bread; now there are many alternatives: tea brands like Xicha and NaiXue sell soft European-style bread, supermarkets like Sam's Club and Hema have baking sections with long queues, and platforms like Meituan offer freshly baked bread for delivery. These channels either have large customer bases or competitive pricing (supermarkets can purchase in bulk at lower costs), making it difficult for traditional bakeries to compete.
Second, rising costs are becoming unsustainable. The prices of ingredients such as flour, butter, labor, and rent are all increasing. Data shows that the cost proportion of the food and beverage industry in revenue increased from 61% in 2019 to 67.4% in 2025, meaning that for every 100 yuan earned, more than 67 yuan goes towards costs, leaving less profit margin. Small and medium-sized bakeries cannot withstand this pressure and often close, while larger brands can still survive due to their scale.
Why Do 2-Yuan Bread Stores Fail So Quickly?
The popular 2-yuan bread (such as the pineapple bread from Guangdong) seems cheap but is actually a short-sighted strategy:
To cut costs, manufacturers use cheaper medium-gluten flour (18% less expensive than traditional high-gluten flour) and reduce the amount of red beans in the filling to 22%, replacing them with adzuki bean paste. As a result, the bread has poor quality and a monotonous taste, leading to customer loss after the first purchase. With such low profits, businesses cannot invest in new products and end up selling the same old ones, eventually resulting in closure.
Why Are High-Price Bread Stores Successful?
In contrast, high-price bread (such as 30-yuan soda bread or 28-yuan croissants) is becoming more popular because they focus on two key aspects:
First, they clearly communicate the value to customers. For example, products like "champignon cheese tangyata" list all ingredients and manufacturing processes, making it clear that the bread uses high-quality materials and complex techniques, thus justifying the price.
Second, they target a specific customer segment. These breads are aimed at white-collar workers and middle-class consumers who are willing to pay for quality and freshness. Data shows that the high-end bakery market in first-tier cities grew by 28% in 2025, with average transaction prices rising from 27.78 yuan in 2020 to 45 yuan—indicating that customers are willing to pay more for good products.
Survival Depends on More Than Just Price
Whether selling low-priced or high-priced bread, successful bakeries must have several key systems:
First and foremost, product quality is essential. Low-price bread cannot compromise on quality (for example, 2-yuan pineapple bread must still taste good), and high-price bread cannot misrepresent its value (30-yuan toast should indeed use imported flour).
Second, a robust supply chain is critical. Advances in local supply chains, such as cleaner labeling and lower-sugar ingredients, allow manufacturers to customize products according to customer preferences.
Finally, refined operations are necessary. This includes adjusting business hours based on community needs, combining online and offline sales, and managing inventory to reduce waste—these practices can help bakeries save costs and retain customers.
Consumers Are Still Buying Bread, but Their Needs Have Become More Selective
The demand for bread remains, but it has become more diverse:
Some people need bread as a basic necessity (e.g., buying a quick breakfast item), while others seek emotional value (e.g., buying visually appealing bread to share on social media). The market size is also growing, expected to reach 859.56 billion yuan by 2029 from 662.15 billion yuan in 2025. The issue is not that no one wants bread; rather, businesses need to identify their target audience and offer the products they want.
In summary, the bakery industry is not dying out but undergoing a reshuffle, eliminating those that rely solely on low prices or misleading price tags, leaving behind those that truly understand their products and customers. For consumers, there are more choices; for businesses, it's about proving their worth through quality and expertise.