A surge in ‘cake sheds’ has propelled hundreds of home bakers to earnings of £1,000 a week, but industry experts warn the frenzy is unsustainable. The phenomenon, which saw thousands selling custom cakes from garden huts and online storefronts during lockdown, is now facing a perfect storm of rising ingredient costs, regulatory pressure, and market saturation.
According to data from the Federation of Small Businesses, the number of registered home-based bakeries has tripled since 2020, with many operators reporting weekly revenues exceeding four figures. Social media platforms, particularly TikTok and Instagram, have been instrumental in driving demand for elaborate novelty cakes for birthdays, weddings, and corporate events.
However, the boom may be short-lived. The cost of butter, sugar, and flour has risen by up to 30% in the past year. Local authorities are increasingly enforcing hygiene regulations, requiring expensive kitchen upgrades. Meanwhile, the market is becoming overcrowded as new bakers enter daily, driving down prices.
‘This is a classic bubble,’ said Dr. Emily Carter, an economist at the London School of Economics. ‘The barriers to entry are low, but the economics don’t stack up for long-term survival. Many will exit within 18 months.’
Sally Thompson, 42, who runs a cake shed from her garden in Bristol, said her income had dropped 40% since January. ‘Everyone and their mum is selling cakes now. I can’t compete with teenagers charging £20 for a drip cake.’
The government has so far resisted calls for specific regulation, but trading standards officers have stepped up inspections. In the past three months, 23 home bakeries have been shut down in the South East alone for hygiene breaches.
Industry giants are also circling. Warburtons and Greggs have launched premium home delivery ranges, undercutting small bakers on price. ‘The big players can absorb cost increases that crush micro-businesses,’ said retail analyst James Blackburn.
For many, the dream is already fading. Online searches for ‘how to start a cake business’ have fallen 60% from their peak. But for those still standing, the key to survival, experts say, is diversification. ‘Don’t just do cakes,’ advised Baker’s Guild spokesperson Laura Green. ‘Offer subscription boxes, run workshops, pivot to savoury goods. The age of the pure cake shed is ending.’
