Thanks, mhendo.
In addition to what others have said, I would speculate that when people buy grocery store cakes, it’s usually for a special occasion, and people are less price-conscious when buying for a special occasion.
Look at it another way; why do grocery stores dedicate staffing and floor space to basic, simple cakes that anyone could bake (if not decorate quite so nicely)?
Because people need/want cakes for all sorts of events, and would rather pay a hefty premium for the convenience of getting one pre-made (and maybe picking it up on your way to your event) as opposed to stocking ingredients at home, spending the time, doing the dishes, and all that.
ETA: that’s not really “looking at it another way.” Not sure why I phrased it that way. 
Firstly, those prices seem pretty damn reasonable to me, for restaurant cake. At run-of-the-mill, not-especially-expensive restaurants around here, the price for a piece of cake or other similar dessert item is usually between six and ten bucks.
Second, i’ll never quite understand why some people expect restaurant food to be priced basically the same as food you get at the supermarket. You understand, i assume, that restaurants have overhead? That the cost of getting that cake to your cakehole is more than simply the cost of making the cake? They pay rent, wages, power, and a whole bunch of other things, and they provide the food to you in an environment where you don’t have to make it and you don’t have to clean it up.
You can buy a 1 liter bottle of Grey Goose vodka for about 40 bucks. That’s just over a dollar an ounce. But you’ll pay anywhere for five to ten bucks for that same ounce of liquor in a bar. Is that “a bad joke” too?
No. These were one layer cakes in a plastic pan.
They most certainly are. My wifes friend worked for 20 years at the Crestwood bakery in West Allis. They pumped out hundreds of cakes an hour on an assembly line. She told me once the overall production cost was like 60 cents including labor.
The cakes I’m talking about were not made this way. Refer to my above. These are factory made, chain grocery store cakes.
The answer I guess is “because people will pay it”.
Sure, if you’re willing to wait 2 or 3 years for your asparagus. 
(Of all the veg to pick for your humorous example, you did pick the one with the crazy growing cycle.)
Exactly. Grocery stores are known for having very narrow profit margins, and grocery shoppers are generally known for being pretty price-sensitive.
I don’t know enough about the bakery section (or the cakes you’re seeing) to give a more complete answer in this case, but I think it’s likely that it’s a more expensive product to make than you think it is. If the store doesn’t have an in-house bakery (a lot of them don’t anymore), they’re having to buy the cakes from an outside bakery, and there’s extra cost there.
If a product isn’t selling at a particular price, they’d either (a) lower the price (but they can only go so far, before the profit falls too low), or (b) stop selling the product entirely. There’s a huge amount of competition for every inch of shelf space in a grocery store, and few stores are going to devote any space to a product that never sells.
Many years ago, back in the early 1990’s, my sister worked at a world-famous family resort in Florida as a food and beverage comptroller at one of the on-premises hotels. One of her tasks was to figure out the actual cost per serving - ingredients and labor- of all items on the menu - these numbers were used to set and evaluate menu prices.
She had brought this work home with her and I read these spreadsheets out of curiosity. The one thing I remember specifically was that a slice of decorated cake had a considerably higher cost per serving than any other dessert item on the menu. The spread sheets also included a column for the mark-up percentage. The mark-up - the percentage difference between the actual cost and the menu price - was WAY lower on a slice of decorated cake than it was for ANY other item on the menu. The difference was profound enough that I asked her what was up with the decorated cake prices and she basically said that they were hugely expensive mostly because of the the skilled labor involved in cake decorating ( the cost of things such as sprinkles and icing decorations was a secondary factor ). She also said they kept the menu price low simply to keep in in line with the other dessert pricing - it just wouldn’t look right if a slice of decorated cake cost twice as much as any other dessert item on the menu and they didn’t really sell enough of it for the artificially low price make a difference to the restaurant’s bottom line,
IANA bakery manager, but the mother of my kids is. There are commercial bakeries who do a pretty brisk business selling full sheet unfrosted frozen cakes to grocery stores. The stores will then break those up into different sizes and frost and decorate them as needed. This is often why they demand 24 hours notice for a custom frosted cakes is sometimes they need a few hours to let the cake part thaw out.
By doing it this way it also gives a level of consistency that would be difficult to match on a routine basis for the grocery store staff. The in shop bakery focuses on high speed fast turnaround high markup items like cookies, breads, rolls, donuts, bagels etc that will move quickly when they are sitting on the displays still warm.
So, does anyone else *really *want some birthday cake right now?
I don’t care how it’s made, I just know it’s going to look like a properly crafted cake, instead of the preschool quality mess I’d make of it.
Grocery store cakes around here are more like $15, and they’re made (or defrosted for all I know) and frosted on-site.
A bakery cake, however, goes for at least $30 - $40, and for the deliciousness that is a bakery cake, I will pay it with a smile.
Speaking as a professional baker, who has worked both small cafes and in Wal-Marts, the expense comes from how freakin’ labor intensive a cake is. Sure, the ingredients have cost, but if you want a nicely done cake decorated by a professional, not a minimum wage high schooler that just slaps it on(at at that rate I wouldn’t blame them) you are going to see a higher cost for time spent on the item.
People who do craft work can also tell you that it’s not the materials, it’s the work. I once crocheted a lace tablecloth and the labor was eight hundred hours(I kept track) Nobody is going to pay me even minimum wage for something like that, that’s why things like that are generally made as gifts.
My sister and I have both baked and decorated gingerbread houses. Once, for charity, we did a model of a local church. It took almost 100 hours of work, so fifty hours each. The church was sold at a silent auction, and brought 500, so that's about 5 an hour for lablor. You wouldn’t have got it for such a sum if it was going retail. It would have been much, much higher.
The bakery I go to isn’t more expensive than the quoted grocery store prices here, and they sure as heck don’t pay their bakers minimum wage.
Even at that price there is a good chance it’s a loss leader.
IME a surprising number of people absolutely do not understand this concerning restaurants or any other business.
That’s not fact, that’s a bunch of BS that you just made up and you know it.
I set prices at my store. I sit there and pull real, actual prices for each ingredient, the flour, the sugar, the frosting, etc, etc, etc.* Then apply my markup to it.
Then I get people saying that kind of crap. “this only costs ____ and you’re selling it for _____, I could make it myself for that.” Great, go make it yourself then. Problem is, they don’t know what it costs. I’ve had people start pulling all the products from the store and very quickly realize that the product that was going to cost them, say $50 to buy from me is already costing them $30 in ingredients and they haven’t put any labor into it.
You want to try and make a cake that looks as good as theirs does for $5, I’ll bet you can’t. Plus, you have to spend an hour or two of your time and clean your kitchen when your done. The $30 cake is probably much bigger than what you get out of a ‘box mix’ and it was frosted by someone that frosts 20 cakes a day so it actually looks nice (pro tip, do a crumb coat first to make the frosting look nice and flat and you probably still don’t know how to pipe on the boarder or write something on it).
On top of all that…those Madeline cakes from Pick are pretty good.
*We don’t make cakes, we make other (deli type stuff), but the idea is the same.
TLDR, lets see you make a cake that looks like the one in the store for $5.
OK, now that we’ve settled the cake question, someone tell me why a bowl of potato soup costs me more than an order of french fries. 
The cakes I saw in the Pink-n-Shaved were single layer, rectangular cakes with chocolate frosting and some red goop that said “happy birthday” on them. They weren’t the works of art you and some others on this thread seem to think they were, and I’ve made that clear a couple of times. I wasn’t even in the market for a cake, I just happened to notice they were $29 and I shit.
A box of cake mix, a can of frosting, and a tube of red goop would indeed make the same cake as the ones I saw, and the total price is about $5!
Where “total” doesn’t include the cost of your own time, wear on your oven and other implements, the fractional amortized cost of your house and vehicle, insurance, health care, utilities, wastage, taxes, etc…
Anything like this will be priced at a level that the market accepts. It may only cost a fiver for the ingredients and materials required to bake a cake, but not everybody has the time to do it (or feels they have the skills) - and yet, some situations in life seem to demand cake - so what are you going to do? You’re going to grudgingly buy a ready made cake.
From the point of view of the store, your grudgingly-paid dollars are counted the same as willingly-paid ones.
Of course, that’s not the only factor in the equation - because customer goodwill must be sometimes maintained, but cake is a luxury food item. If they priced raw pasta or rice or potatoes at a premium, there might be an uprising of angry customers (or just a drift away to a different outlet) - but cake is more of a “Well, do you want it or not? - Because here’s the price” thing.