Tuesday, 19 November 2013

"Waitrose reports Buckingham cafe owner to OFT"

From the BBC:

A coffee shop owner has been reported to the Office of Fair Trading (OFT) by Waitrose, claiming the shop's free groceries offer is damaging their business.

Garry Sutherland runs the Gelateria Gazzeria in Meadow Lane, Buckingham, 20 yards (18m) from a branch of the supermarket.

He said his coffee sales had quadrupled since he started giving free groceries to regular customers. Waitrose argue that the offer is "unfair trading".

Mr Sutherland said the promotion allowed him to compete against larger chains. His regular customers receive a free bag of organic vegetables, a choice of herbs and spices and 500g of fresh meat each time they buy a drink or a serving of ice cream.

Mr Sutherland, who charges £2.05 for a regular and £2.45 for a large white coffee, said he had gained £2,000 sales a week since he started the offer six weeks ago. Sales at the nearby Waitrose have fallen by half in the same time period.

A Waitrose spokesman added: "The loss of custom would be bad enough but he's getting all the MILFs as well."

4 comments:

The Stigler said...

They're hardly losing any money on the coffee. The vast majority of the costs of a cafe are fixed. Rent, staff, equipment, heating, marketing etc. It's generally reckoned that 2-3% of the cup is the coffee.

But if you count how many more of those customers will also have a scone with their coffee and how much that is, or that their kid wants an orange juice, and you work that in, Waitrose are probably making more money from those extra customers than if they didn't give away the coffee and the customers didn't come in.

Kj said...

Competition is a bitch!

Kj said...

Undoubtedly this bastard is also providing free seating to his coffee-drinking customers.

Mark Wadsworth said...

TS, it's called loss leader.

But you're not really paying for the coffee at all, you are largely paying for the sit-down in a pleasant atmosphere. In that sense there is little competition between Waitrose and the coffee shop.

e.g. we have a Waitrose near us (doling out free coffees) and a Costa directly opposite, and unless I was really skint (or wanted a coffee to take with me on the Tube), I would rather have a nice sit down outside at Costa for £2.15 rather than sitting on the bench in from of Waitrose.

I know it's not rational, but there you go.

Kj, it's all about the seating!