Recently I was interrupted at work by a reporter from a Sunday newspaper who had come to witness firsthand the doom and gloom down at the Financial Services centre. Following the ESRI’s declaration of doom in the economy, JP Morgan’s financial difficulties and the plummeting of Irish Bank shares on the ISEQ, she came to see just how bad things had gotten for the cafes, bars and restaurants. When I informed her that in fact our sales hadn’t really been affected she gave me a look so incredulous that I suspect she thought I was making it up. Despite the doom and gloom in the finance sector, on which we are heavily reliant, and the obvious difficulties that the larger retailers were experiencing, a stall that sells primarily coffee was thriving. This made me think, is coffee immune to external economic factors?
The Financial Services centre is by its nature, an expensive place to eat. The rents are massive, the retailers are reduced to a 5 day footfall (who wants to visit work on their day off) and the clientele are usually pretty well-to-do. If you visit any of the cafe/convenience stores you can see that these factors are manifested in an eight euro box of “lettuce and packet sauce” served with stale crutons. I worked for two years in Financial Services and learned that one can save a small fortune by bringing a sandwich to work with you, something that was a little ridiculous not so long ago. I have noticed however that there is less space these days on the benches and steps around the IFSC (International Financial Services Centre) as the big wigs and suits tuck into their Ploughman’s sandwich, how positively fourth street!
This brings me to my point, you can bring your own lunch to work but you cant bring your own Cappuccino. Getting the Train to work instead of driving and parking could save you about a tenner a day, bringing your own lunch anything from 4 to 14 euro but can anyone who drinks a decent coffee, made by a Barista worth his salt (ahem), really justify a saving of 2.60 where the consequence comes freeze-dried in a jar? There aren’t many who could.
The luxury factor is another variable at play. Dublin has many luxuries; restaurants, shops, theatres, cars, the list is endless. How many of these luxuries cost less than a fiver though? If Dubliners are gonna tighten their belts I say its with the larger spends. Coffee is the only luxury a lot of these people can still afford and a lot of them will have to be pushed very hard before they give it up.
There is something reassuring in seeing a large chain see their offer of free coffee with a sandwich passed up in favour of the small guy. The inelasticity of coffee has been much debated but anyone that works in the industry knows how any coffee drinker has their high water mark. Once they’ve tried a certain standard, it’s much harder to go back to a lesser product. I suspect that if I could give a potential customer a coffee on three consecutive days they would not only favour us over the nearby larger chain, but would suddenly become adverse to the same coffee that they used to drink. They would have in effect created a new high water mark. Its just a matter of keeping one step ahead of the big guy…