Published 7:00 am Wednesday, July 8, 2015
For many, coffee is the get up and go beverage that starts the day.
Some people can’t even take the first task into consideration until their first cup of joe has been consumed, which means coffee companies, and businesses that sell premium coffee at a premium price, are making a profit off this addiction.
But what happens when the price of coffee per pound declines, and a gourmet coffee shop increases their price?
Common sense would say that when the price of a commodity goes down, the price charged to the consumer should follow suit.
With one well-known company, which we won’t name here, the opposite is true.
Not only did the price per cup at this establishment go up last year, according to coverage by USA Today it went up again this week. In spite of the price for coffee falling about 44 percent compared to last year’s high point, this business is now charging between 5 to 20 cents more per order at their franchises.
The company attributes their price increase to the fact that they have rent, light bills and employee pay and benefits to cover. But the USA Today story shows that coffee purchased to stock their franchises make up 88 percent of their total expenses. With so much of their expense tied up in coffee, it appears that when the price of the beans drops, so should the cost per order at the establishment.
However, a major brand name of coffee sold on store shelves decreased their prices.
So what should this say to you, the consumer?
It should say that you should reconsider whether you want to pay more for the same product when the company is paying less for it.
The option is there to perhaps make coffee at home rather than paying a premium to have someone else do it for you, and save those extra pennies. The pennies will add up.