Sunday, 19 January 2014

An interesting model in Cafes

from the Guardian

A Russian cafe chain called Ziferblat has opened its first UK store in east London. It provides tea and coffee and Wi-Fi for nothing – but it's 3p a minute to sit there. I know. Genius.

But in Shoreditch where this is based, this makes sense. The biggest chunk of a cup of coffee in that area is the space you're occupying drinking it. You compare the price of a coffee in central London with the price of a coffee in say, Swindon, and there's a bigger difference in price than the price of the coffee beans (about 20p of the cup)(1). The extra rent is being added into that coffee.

If someone has 2 coffees in an hour instead of 1, all that's really costing a restaurant is in coffee beans and maybe milk. Staff, rent, heating, lighting are all fixed for the period. They're sitting at the same table, denying it to other customers whether they drink 1 or 2 in the same period. By charging for rent, it's charging based on the most expensive bit of the coffee being drunk.


Mark Wadsworth said...

Yes of course, a large part of the cost of a cup of coffee etc is the embedded rent.

But it must be really annoying at such a place if there is a queue to pay, it's costing you 3p a minute just to stand there.

The Stigler said...


Not sure what they do with that.

It's also without doubt affected by the free use of wifi and how some people will hang around for longer if you provide it.

Derek said...

Yes, clever idea. When will they try it out for pubs?

Bayard said...

Mark, presumably you have to be seated by a member of staff, so they know when to start charging you. Similarly, when you have finished you let a member of staff know and they switch the clock off and you can pay at your leisure.

Mark Wadsworth said...

B, yes, but how long does it take a member of staff to notice that you want them to switch off the clock?

Bayard said...

Well seeing as they are Russian, you would probably have to fire a gun.