Paterson's has been going strong since 1916, and the secret of its longevity is no secret at all: whatever it does, it does well.
A year ago, the premises were given a modern makeover and a smart cafe was added, separated from the cake shop by gleaming cabinets filled with tiered wedding cakes and birthday cakes in the shape of dalmatians, cats and so on. In the process, tradition was not thrown out the door, so the shop still offers such dietitian-disapproved glories as almond dainties, iced fancies, sausage rolls and party pizzas. The cafe itself would put most of its counterparts in trendier locations on the back foot. It's the attention to detail that makes the difference: the latte glasses come with an ouch-proof paper serviette around them; the tea is leaf and in a plunger. The food is good, and more varied than you would expect from a cafe born of a cake shop.
Did we say it is really inexpensive as well? South Yarra, eat your heart out.