Gwendolen tells Cecily that cake and sugar are no longer fashionable as a way to assert her superiority and passive-aggressively insult Cecily.
This happens during their tea scene, where Gwendolen initially believes that Cecily is engaged to her Ernest (Jack). Out of jealousy, she tries to establish dominance by making Cecily feel socially inferior. When Cecily offers sugar for her tea, Gwendolen responds:
"Sugar is not fashionable any more."
And when Cecily offers cake, Gwendolen pointedly declines:
"Cake is rarely seen at the best houses nowadays."
This moment is an example of Wilde’s sharp wit and satire of Victorian manners. Gwendolen’s comment is not based on actual fashion but rather on her attempt to insult Cecily, showing how politeness in high society often masks competition and passive-aggressive behavior.