Saturday, April 08, 2006

Don't choke on that drink

A cup a cup a cuppahSo Coffeeshops are not only increasing the price of a cup of coffee, but some are doing so across the board for all hot beverages by the same quantum - 10 cents. This was originally triggered by the increase in the price of coffee, apparently because coffee prices have increased.

Many people are not happy about this, but what's so wrong about it? People who sell a cuppa are businessman who have an obligation to increase shareholder value, just like the big boys do when they increase their prices of goods and services, citing shareholder value. A business' first loyalty is to its owners, we are often reminded, which are the shareholders, not the consumer, not the customer, right? The capitalist is king, is it not?.

What the coffeeshops are doing is no different. The difference is if you can get away with the price increases. Coffeeshops may see a short-term decrease in business as people defect to other coffeeshops that can offer cheaper hot beverages. This can have a ripple effect in that foodstall owners might see a smiliar decrease in business because these same customers have defected to other coffeeshops.

But going by experience, Singapore consumers will eventually accept the extra 10 cents they have to fork out because they cannot do without that plate of Char Kway Tiow that is sold in the same foodcourt where drinks cost an extra 10 cents, or the alternative foodcourt is just too far away, etc. Moreover, knowing Singaporeans, they'd find it a hassle switching just because of 10 cents, or even 20 cents. I have been told that some coffeeshops are charging 20 cents more per cup of coffee. Ultimately, its really up to the consumer to vote with their feet, or their stomach. All things considered, I think they will stay put.

Its the consumers' choice, so put up or go somewhere else.

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