The hospitality industry is facing challenges such as rising costs, cost of living crisis and price pressures in the coffee market. Yet, this is also a time of opportunity. It is not a time to be paralysed by fear. It is a time for action.
I’m Richard, Wholesale Manager at Pablo & Rusty’s. Here are 10 things cafes can do to stay ahead.
1. Focus on the experience
Customers don’t just come for a cheap cup of coffee. They come for the experience. The ritual, the social interaction and the atmosphere. Keep it personal. Invest in customer service and create an inviting environment. People value experiences over transactions.
Now is the time to improve your coffee, not cut corners. Coffee is why people choose cafes. If they wanted cheap, there are plenty of other options. They’re looking for quality, a great experience and a sense of community. It’s a good idea to regularly check your customer reviews.
Read more about 10 questions every cafe owner should ask.
2. Adjust your prices
Coffee prices need to rise. They need to be around $6.50 for global parity. A specialty flat white should be $5.00 at a minimum, moving toward $5.50 in the future. Small, consistent price increases are necessary to sustain margins. Many customers will continue to support you.
Read more about how to raise prices.
3. Get ready for summer
Prepare for summer by expanding your cold beverage offerings. Introduce iced coffee variations, ready-to-drink options and refreshing mocktails. Introduce salads, specials and small bites. These can appeal to customers looking to cool down and try something new. If you do catering, update your catering menu for the summer.
4. Create value beyond price
Value isn’t just about low prices. Offer smaller portions. For example, half sandwiches or mini treats for budget-conscious customers and to upsell. Create bundles like a coffee and a toastie combo. Try offering specials or takeaway offers during slower hours to attract regulars back.
5. Embrace indulgence and experience
Customers aren’t always looking for value; sometimes they want to indulge. Add premium options such as signature drinks, special coffees (think pour-over, mocktails, rare coffees), or unique dishes. Special experiences create memorable moments and give customers a reason to return when they feel like splurging.
Read more about rare coffees here.
Remember that your specialty coffee partner is a great resource for business as well as coffee support. At Pablo & Rusty’s, each of our partners has access to a business specialist and a coffee specialist. The business specialist can help you with all things business-related. The coffee specialist is your go-to person for coffee ideas, quality, training and everything in between.
6. Upgrade your equipment
Look at innovations that can save time and reduce waste. Grind-by-weight grinders, milk systems and telemetry setups can increase efficiency, improve quality and minimise waste. These upgrades help handle peak times smoothly.
Unsure if your coffee equipment is the best for your business? Get in touch with us for free advice.
7. Eliminate the unnecessary
Eliminate anything that doesn’t add value. Whether it’s low-selling menu items, inefficient processes, or apps you don’t need, cut the fat. This will free up time for what truly matters: improving the customer experience.
Regularly renegotiate your energy contracts and shop for better rates. Use energy-efficient appliances and consider timers or energy-saving modes to reduce costs without impacting operations.
Lastly, be guided by data. You should have a good handle on what’s selling and what’s not. You should always know your cost of goods, wages and profitability.
8. Fight waste
Waste is terrible at multiple levels. It’s bad for the planet and it’s bad for your profit. Equipment upgrades can help. However, the place to start is to monitor and record waste. Whether it’s ingredients that have expired, or pastries that have gone stale. Keep an eye on wasted milk and plates coming back not empty. Once you are recording the waste, focus on the biggest areas first. Even reducing waste by 25% annually will lead to thousands of dollars over the year. And it will also reduce your waste bill and be better for our planet.
9. Build a flexible team
All-rounders are the future of hospitality. Team members who can do multiple tasks such as taking orders, making coffee and serving food can bring agility to your team. This allows you to adjust to busy and slow periods with ease. Every member of your team has a role to play in customer experience and marketing. You should have an ongoing program to train up each team member in more than one area.
10. Lean into marketing
You should be running a marketing activity at least once a month. While word of mouth is key, even the best cafes need to spread the word. Make sure your specials are visible, retail shelves are tidy and labelled and staff know how to upsell to the right customers.
To attract new faces, try handing out flyers nearby, visiting local offices, boosting social media posts and using geo-targeted ads to reach potential customers online.
Bonus: Talk to your landlord
Rent is one of the biggest fixed costs for cafes. If your lease renewal is coming up, it’s time to reassess the situation, especially if you're in an area where foot traffic is still down post-COVID. Many CBDs haven’t fully bounced back, yet rents may have risen. Negotiate fairly based on current conditions. Even if you're not due for renewal, it’s worth having a conversation with your landlord as some may be open to discussing terms.
Now is the time to rethink, reimagine and rebuild. Want some help to take your venue to the next level? We’d love to help!
