The little girl was with her mother and younger brother in Greggs on The Headrow, Leeds, when she was assaulted by a man, West Yorkshire Police said.
Police released CCTV images of a man they wanted to trace in connection with the incident.
The investigation has now led to an arrest.
Chief Insp Mark Griffin from the Leeds district policing team said: "A 34-year-old man from the Bradford area has been arrested on suspicion of sexual assault and has been released on police bail pending further enquiries.
"I would like to take this opportunity to thank all those who shared our appeal for information, and for the public's support in this matter."
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