11/04/2024
Hey Everyone, it’s been a minute… I just want to add my 2cents to this and say that Jo is absolutely spot on.
Jo is one of the kindest, caring, most talented and knowledgeable people I know and she represents an entire industry in her words. Being an “indie” is terrifying and there is no telling what the future holds or when/if the tide will turn.
I won’t bore you all with my/our war stories but we’ve taken a heck of a beating over the years and tried our best to support our customers by not increasing prices in exactly the same way Jo is talking about. Despite our best efforts and doing everything humanly possible, we still receive cries of “how much?” and its soul destroying.
I’m not here to pitch for CloudGate, or for the coffee industry, I’m here to say that Jo is a way better orator, business person and frankly human than me and the fact that she is feeling like she is speaks volumes. The hospitality sector is on its knees and so is the economy. I see a lot of people saying things like “yeah but I can’t afford to pay £5 for a cup of tea anymore so I don’t visit”. That’s really sad. People can’t afford luxuries which coffee, cake and nice meals out are, but also the indies are the ones not charging £5 for a cup of tea and are instead, not paying themselves. Neither side is wrong in that scenario, we are all doing our best and we are all struggling. I’m in both camps, I haven’t been able to afford to pay myself in over 2 years and as a result I can’t afford nice meals out with my family. I treated myself to a jacket potato today at the Eatwell cafe at St. James hospital and before I ate it, I had to justify the purchase in my head. “It’s your daughter’s birthday this weekend, that could go towards something for the party”. What kind of world do we live in where that’s even a consideration. I also felt a strange pang of guilt for not buying from an Indie and tried to justify it by hoping that profit from my purchase would go towards supporting our incredible NHS. Whether that’s true or not, I don’t know, but those NHS workers who have been angels to me, my family and so many others deserve a lot more than a clap. But I digress.
I don’t know what the answer is. Frankly I’m not even entirely sure what the question is, but I applaud Jo, and all the other Jo’s out there trying every day to add a bit of brightness to people’s days, done with a smile and a friendly word, all while probably suffering all manner of things that people shouldn’t have to go through and definitely not what they thought they were signing up for when they started their ventures.
We’re all trying our best, and that’s all anyone can ask. I guess I just hope that our best is enough to keep people happy enough to keep making kind choices and to be able to keep going until something changes. If we lose a Milliefox or any of the other wonderful indies we are surrounded by, our communities become darker places and that’s really sad.
Apologies in advance is a long message but please read to the end 😊
I was having a conversation today about pricing and value. I was explaining how I feel like there is a ceiling to how much independent cafes can charge for a cup of coffee (even if it is delicious). As a general rule the overheads of an independent are higher than large chains due to purchasing power. Plus a lot of independents work hard to source locally and free range, but the value of this is not always seen when you walk into a cafe. We were discussing that although people are beginning to see the value of supporting independent businesses, the general perception is that independent hospitality businesses should be cheaper than the big chains. We were trying to work out why that would be and why comments like “you can get a cup of tea at x for a £1” are still what people say to the pricing discussion. A lot of places that can afford to sell tea & coffee for a £1 are charities or subsidised establishments. They have volunteers so no staff costs or low ones. They have lower rents, no business rates, no VAT to pay. We also discussed inflation and how people get stuck thinking about the past, “when I was younger you could buy”. These are lovely when reminiscing but when businesses are trying to work out how to keep their customers happy and still keep the lights on it’s not helpful to still hanker for the old days. I started my first coffee shop (2015) I looked around saw what the chain brands were selling coffee at and then shaved a bit off checked I could afford that and set the price, £2.80 for a large latte. Even though the profit margin wasn’t great I felt as a small independent, I couldn’t charge what costa & Starbucks do! Why? I was giving a great service, great product and knew all my customers without having to write their name on a cup!! But I clearly didn’t value myself or my business as highly as I should. Setting prices has become even more difficult lately with the cost of living crisis, If I put the 2015 price into the Bank of England inflation calculator it says that latte, in 2024 should be £3.70 but because the VAT threshold is so low I have to add VAT to every coffee so that makes a latte £4.44. Currently the big chains charge between £4.60 and £4.80 for a comparable size.
Our current price is £3.30 this is £1.14 less than the Bank of England are telling independents to sell for and £1.50 less than the chains! So what should we do? I constantly worry that if I put my prices in line with the big brands we might lose our customers. I guess the question then becomes do our customers see our value or just the price. Everything we do is homemade, we cater for allergies, all our cakes are fresh (not frozen or in plastic), we can change items on the menu to suit your tastes because they aren’t pre packaged! Plus our team love the customers and make an effort to remember names, how they like their coffee, what their go to cake is etc. With the cost of living crisis food costs have gone up by 38% on average so independents should be putting their prices up to account for this but I know many businesses who it frightens to death, because what if everyone stopped coming? How would we pay our amazing teams? Pay the rent on the building, turn the lights on? If prices don’t go up inline with costs & inflation how do we pay ourselves? The answer is, we can’t! Independent business owners don’t get a guaranteed salary, there is no head office supporting them, there isn’t a board making decisions is just us and we get what is left after the staff, tax and all the bills are paid. Independent business owners love their businesses if we didn’t we would get a job. But we like everyone else we are entitled to at least national minimum wage at the end of the month. If you have got to the bottom of this very long message this is not a woe is us piece. Independents are not saying support us and ignore the chains because they all employ people as well. This is me genuinely raising the issue of pricing and value. I appreciate you taking the time to get here, but please leave me a comment as I really want to know what customers think about pricing and if you would still come in if a large latte was £4.50 like a large chain? If it’s too high do you only use independents and why? Is it price related? Were you aware there was such a difference in pricing or do you just go where you like? Thank you.
