Then we raise the problem that this is not longer some simple, happy little shack where I get my coffee and relax. Higher density, higher volume means I wait in a potentially long line, have my personal space violated both considerately and inconsiderately by total strangers, feel the anxiety of being in a potential fire hazard area, etc. Arguably, none of this is better. I am more willing to pay a premium on the coffee than to deal with all of that.
The better bargain is to decrease shop area and worker count, and increase number of shops.
Tokyo seems to do just fine with 5-seat places...
Convenience is a very powerful motivator, and these people are prioritizing it over minimizing monetary expense.
IIRC McDonalds even went as far as to become a landlord many of its franchisees, so it pays rent to itself.
For many small businesses - especially mom and pops, the majority of the surplus value is captured by property owners, and the amount has increased over the years. This is partly how Piketty's r > g came about.
I read somewhere that McDonald's makes more money from their real estate holdings than anything else they do. Can't vouch for how accurate that is, but it seems very plausible.
> About 85% of the company in 2016 was represented by franchisee-run locations—people who agree to operate individual McDonald’s restaurants with a licensed privilege to the branding. But rather than collect a lot in royalties or sell its franchisees cooking equipment, McDonald’s makes much of its revenue by buying the physical properties and then leasing them to franchisees, often at large mark-ups.
https://www.wallstreetsurvivor.com/mcdonalds-beyond-the-burg...
> Today McDonald’s makes its money on real estate through two methods. Its real estate subsidiary will buy and sell hot properties while also collecting rents on each of its franchised locations. McDonald’s restaurants are in over 100 countries and have probably served over 100 billion hamburgers. There are over 36,000 locations worldwide, of which only 15% are owned and operated by the McDonald’s corporation directly. The rest are franchisee-operated.
On coffee too, they're big enough to go straight to the farmers and set their prices
https://www.thecommonscafe.com/starbucks-criticized-for-low-...
(And actually, all that has been done, but action isn't being taken, so now we have to solve that problem)
Most places with high demand like this also have prohibitions (or limited parking/operating permits) on things like coffee trucks, in my experience. Another issue with our prohibitive land use practices in north america.
So maybe find a pretty outdoor area where there are lots of tourists.
Even for "speciality coffee" it went lid, cup, sleeve, milk, (syrup,) coffee.
But I think you/he should look around. If you're not a fast food restaurant coffee costs a bit more than that these days, and charging 'a bit less' craters your profit margins.
(Of course, the real money is in laundering.)
Edit: I just looked up the local 50’s diner. $2.79 for what is probably bottomless but burned drip coffee. That definitely makes them money. But That’s 39% more than $2.
To reiterate: if someone tells me they’re planning to sell coffee for $2 I believe them. And then ask where they think they’re making their money because it’s not going to be on the coffee.
Just for everyone's interest, (and based on 2022 pricing) you can get an espresso in an Italian bar for $1.33 (Trento) all way way down to $0.96 (Naples).
Having tried the US and the Italian versions, I'd take the latter every single day of the week and twice on Sundays over the US version.
https://www.statista.com/statistics/717413/average-price-of-...
I’ve watched just enough of his stuff for him to sell me on the idea that maybe manual espresso presses produce a more consistent cup with just a little practice. Also they seem to be cheaper. Is that what they were using in Italy?
They're using the big industrial-looking espresso machines, since throughput is everything.
You pay at the (separate) till first, then take your paper receipt to the bar, hand it over, and 90s later you're handed your drink.
I've ordered a lot of coffee in Italy and have never ever heard a discussion about drink size, flavours, soy, or skim milk. That stuff is apparently irrelevant.
I'd love to hear more about this, and how one defines "better", because it doesn't sound like this is going to work for everyone.
Full disclosure: I've spent the pandemic being amazingly grateful that - by chance - I happen to live in a low-density part of the world. It has its downsides, but on the plus side, from my home I can walk to open countryside in pretty much any direction in a few minutes.
I was responding to someone suggesting that increased density would help with retail profitability.
If we were ro make housing more dense but use the extra space as countryside that's not going to provide any more customers within the catchment area of the OP's coffee shop, is it?
If your current area has 400 residents but you can still easily walk to open fields, increasing that to 1200 residents in the same area would triple potential coffee customers while maintaining the same access to countryside.
Sure! The discussion was about enjoying small independent coffee shops, and how to run one profitably, so my description of "better" is w.r.t. that issue - for persons who want to run such a coffee shop, or who want to visit one. The identified issue is that per-purchase margins are fairly small, and to sustain a business it requires a lot of these small purchases. As property (mortgage/rental) costs are also high, having a small space is also important. So to get a lot of customers despite being a small space, you want to be either near a natural attraction (park, beach, etc), or near a lot of people (office building, metro station). Density helps with the latter.
> I happen to live in a low-density part of the world. It has its downsides, but on the plus side, from my home I can walk to open countryside in pretty much any direction in a few minutes.
And how many independent coffee shops can you walk to in a couple minutes?
Starbucks: they don't charge $2 a coffee. I would only ever get a drip coffee and I think it's around $3, most people who are going there get drinks in the >$5 range. Plus they have a lot of traffic - more customers = less wages required for each drink
McDonalds: They charge less than $2/coffee. They charge less than $8 for a breakfast. They make their money on super high volume.
Your vision: you're enjoying lingering, enjoying the sun. You're enjoying the floor (patio) space, which means you can't have high volume unless you have a huge space, which wouldn't work with your "little shack" concept. Unless there's a nearby park or beach with free barely limited space, while also still having enough traffic to stay busy. Very limited spots that can work.
(so as with most issues regarding our urban spaces in north america, what we need to make them better is more density. :)