Sunday, November 12, 2006

Coffee Pricing Madness!

I am at the same time amazed and angry at the rising prices in national brand coffee shops (no names will be mentioned here). Having run a coffee shop, I understand the costs involved in providing a freshly brewed cup of coffee to a friend on the other side of the counter. On average, for a 16oz coffee, my costs were:
Polystyrene cup - $0.14
Plastic lid - $0.04
Coffee - $0.25
Condiments/Cream/Milk - $0.08
______
Total $0.51

I factor in labour, rent and other things and my price was $1.80 including GST. This provides me with a reasonable profit margin if the sales volume is what I need it to be (not much).

So why is it National Coffee Chains need to raise their already high prices under the guise of needing to combat labour shortage, rising gas prices, etc? They don't.

Now, if these National Coffee Chains said we are raising our prices to combat economic factors which impede our rate of expansion in our current markets; I would whole-heartedly agree. I am not against making a dollar in our society, but transparency is key.

Step back and think about the actual cost of coffee and the motives behind rising prices. If the motive of price increases are to make a National Coffee Chain larger and richer, then I do not support it. If it is to maintain a certain level of service I enjoy, then yes, I'd buy that coffee.

Keep in mind what your choices are and vote with your dollar. Perception of good coffee can affect your decisions greatly. I like my coffee to be brewed on small batches to keep the coffee fresh. I tend to shy away from places that keep the coffee "cooking" in big square sattelite brewers. My attitude is, hey, I spend good money for a cup of coffee, spend some of that money on me!

I realize this probably went past a post into rant territory, but try diversifying your coffee dollar and keep the variety in coffee vendors alive! Monopolies, Duopolies or Triopolies will not help anyone get a decent cup of coffee for a decent price.

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