How Coffee Shops Can Beat Inflation:
The Power of Storytelling and Quality Over Cost-Cutting
Dark clouds are forming over the heads of too many coffee shop and cafe business owners. Inflation has taken its toll on their profits over the last few years; ingredients, labour, and energy costs have grown at a higher combined rate than ever before, nibbling away like unwanted mice in their dry store.
Owners and managers react in different ways to mitigate these cost pressures. With the cost of energy mostly outside their control, the options open to them are increasing prices, getting more customers, reducing the cost of ingredients or portion sizes or reducing staff costs.
While cash-rich companies can invest in new, more energy-efficient equipment or expensive labour-saving coffee machines like Eversys, this is not an option that most coffee shops and cafes have.
With so many having a foundationless pathological fear of putting up prices then, the quality of the menu item will often be downgraded or downsized. Particularly if you get an accountant involved in the decision-making process.
There will be an immediate improvement in your profit margin, your accountant will be happy and then, guess what, your guests will notice.
Their single slice of cheese instead of a hearty couple of slices will make them feel short-changed after all; they come to you in the first place not because you're cheap but because you're better.
Lowering your standards will erode your point of difference, which is why many of your guests choose you over your competitors.
Why not do the opposite? Make your menu items even better and put up your prices, but tell your guests the story of everything you sell.
When we speak to owners of independent coffee shops and cafes, time and time again, they will share with us how they support local producers, only choose the best-tasting ingredients and the other hundreds of little things they do to make themselves super proud of their business.
They go the extra mile in everything they do but don't want to charge more than the faceless chain across the road, where everything is made in a factory from ingredients sourced from the very cheapest suppliers.
The biggest issue is that they don't share the story of each menu item and put no work into the naming or marketing. They expect all their customers to know what is inside their heads.
They sell a list of ingredients. How often do you see something like a mozzarella and tomato panini on a menu?
A few seconds on ChatGPT can inspire you - here is what it gave us as an alternative name for the humble mozzarella and tomato panini.
"Tuscan Sunlight Panini"
This name draws inspiration from the Italian countryside, where tomatoes and mozzarella are staples, and hints at the sun-kissed, Mediterranean flavours of the dish. It suggests simplicity, warmth, and freshness.
There are many more opportunities to improve a menu and increase profitability during tough times; that's what we do daily with coffee shops and cafes.
Don't dilute what makes your business great by penny-pinching or 'value engineering' as it's known in the industry; double down on your quality and tell everyone your story and the story of everything you sell.
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