Solos and Coffee Shops

by Gray Cargill on November 10, 2008

Nothing says “time off” like hanging out in your favorite coffee shop with a good cup of coffee reading the newspaper or surfing the web on your laptop.  It sure beats sitting around your house by yourself.  And it’s a lot less expensive than hanging out at the local bar or restaurant or going to a movie.  Coffee shops were made for solos….weren’t they?

In this blog, I have often written of solo dining from the point of view of the solo diner and our rights.  Recently, I thought about it from another point of view: the economics of the business itself.  On Saturday, I went with a friend into a local coffee shop which has solo seating at counters as well as tables that can accommodate up to four people each.  Only 2 solos sat at the counters and most of the tables were taken up by solos on laptops who looked like they were settled in for the winter.  We left because we didn’t just want coffee, we wanted a place to sit comfortably and chat.  As we left, we remarked about how we felt they were losing money because of all the solos taking up table space for long periods of time.  It was the first time I’ve ever really thought about the economics of a coffee shop.

Potentially, a solo could take up a table for half a day, using the free wifi or reading a book or newspaper and only order a cup or two of coffee.  Depending on the prices at the coffee shop, that could be as little as $3 or $4.  It boggles the mind that a business can be profitable that way, and yet, apparently it can be.  This place I’m talking about has been around for over a decade.

So I did a litte online research about the profit margin of coffee shops.  Apparently, if it’s done right, they don’t have to sell a lot of coffee to make a profit.  The space costs something, of course, but employees tend to make minimum wage, wholesale coffee isn’t that expensive, and the machines are often provided by the coffee distributor.  It’s even more profitable if the shop roasts its own coffee, because they can then sell bags of beans, too.  The least profitable items are the dairy products used in coffee drinks and food items.

Wow, who knew?  So, given how little product they need to turn over during a day to make a profit, no wonder they don’t mind having people sit there all day surfing the web.  As it turns out, I guess coffee shops really were made for solos.

admin November 11, 2008 at 12:55 pm

That would be the ideal, wouldn’t it? Trouble is, so many coffee shops have leased space in buildings where they don’t have a lot of options about how to reconfigure them.

Did you see that Starbucks just reported that their profits plummeted by 97% in the fourth quarter? They’re probably getting slammed by the cost of all that whipped cream they throw on top of their drinks! Heh. 😉

admin November 11, 2008 at 5:55 pm

That would be the ideal, wouldn’t it? Trouble is, so many coffee shops have leased space in buildings where they don’t have a lot of options about how to reconfigure them.

Did you see that Starbucks just reported that their profits plummeted by 97% in the fourth quarter? They’re probably getting slammed by the cost of all that whipped cream they throw on top of their drinks! Heh. 😉

Nightrider November 11, 2008 at 10:36 am

Coffee shop economics…a good topic for someone’s thesis no doubt! I’m surprised with all the caffiene flowing in coffee shops that more disagreements don’t break out over use of booth space (“dude – chill – I’m entitled to this WiFi bubble” vs. “come on booth-potato, I don’t see any squatter’s rights entitlements here”). Maybe there is a consulting business here in helping coffee shops reconfigure to optimize the capture of “coffee spend”. One way to configure might be to have a walk up window for those who just want to “drive by” (like Nectars), a designated WiFi lounge for the “surf and sip” crowd, and a designated socializing area for those who want at least a duo-friendly experience (no WiFi squatting here). Hmmm…there are some empty buildings at the top of Church street….possibilities. In the mean time we must remember to all be as civil as possible during caffinated territory squabbles in our favorite haunts.

Nightrider November 11, 2008 at 3:36 pm

Coffee shop economics…a good topic for someone’s thesis no doubt! I’m surprised with all the caffiene flowing in coffee shops that more disagreements don’t break out over use of booth space (“dude – chill – I’m entitled to this WiFi bubble” vs. “come on booth-potato, I don’t see any squatter’s rights entitlements here”). Maybe there is a consulting business here in helping coffee shops reconfigure to optimize the capture of “coffee spend”. One way to configure might be to have a walk up window for those who just want to “drive by” (like Nectars), a designated WiFi lounge for the “surf and sip” crowd, and a designated socializing area for those who want at least a duo-friendly experience (no WiFi squatting here). Hmmm…there are some empty buildings at the top of Church street….possibilities. In the mean time we must remember to all be as civil as possible during caffinated territory squabbles in our favorite haunts.

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