It is probably more subtle than that. You have to have a surplus of goods so there is selection. There needs to be enough pastries on display so that people will be able to find something they want.

And when money was flowing, he could afford to sell pastries at a loss to keep his customers happy. When he couldn't afford it anymore he was forced to change. Perfectly normal. What is out of the ordinary is how he reexamined his assumptions and created a better solution -- instead of hamhandedly cutting pastries altogether.