Coffee pricing at Chalukya

[skthewimp]

The pricing of coffee at the Samrat restaurant (part of Hotel Chalukya on Race Course Road) is interesting. This is a popular old restaurant, and being in an area full of government offices, is perennially crowded (despite its large size). It is a sit-down kind of restaurant, though you might have to share a table with strangers if you've gone in a

Comments

[anonymous]

Very interesting observation. I have a naive question:

Are the quantities the same? I remember the Sagars always used to have the kutti "tumbler" coffee and the sit-down restaurants (I using Ullas as an example) have it in a ceramic cup that typically has slisha higher volume.

If you think volumes are the same, let me know. I will think of other reasons.

- Paddy

[skthewimp]

yes - the volume is usually more - that ceramic cup. though you have a fwe sit in places which serve in really small ceramic cups! and the cup size in chalukya is the same as that for ullas.

but as arvind explains below, the cost of making the coffee is miniscule. definitely < Rs. 2 a cup. even the darshinis make a huge margin.

here i'm trying to understand how seating space and service are priced...

[anonymous]

>> the cost of making the coffee is miniscule. definitely < Rs. 2 a cup. even the darshinis make a huge margin

[anonymous]

I beg to differ.You can have endless queues(lingering over coffee) whatever be the price for Coffee(assuming no one would have pseudo-maxed coffee prices).People don't get driven away if seating caps are full.
Wait--Do places get crowded solely over people lingering over coffee?
then it must be worth waiting for.

Restaurants making equilibrium profits by hikes in coffee prices?---somehow the whole arguments are sort of skewed i feel.We are driven to a narrow perspective by someone who tasted a relatively expensive coffee in a crowded place who thinks the crowd has been managed by price hikes.

'slightly superior product by packaging in cup and saucer'--this doesn't explain consistent/lower prices for cup/saucer across all coffee chains

Are

[arvindn]

in the US, you don't really pay for the coffee at all, purely for the atmosphere and the wireless internet, etc.
coffee is normally around 5 dollars. in the more upscale coffee shops, the price largely serves as a status symbol and to keep out the people who can't or won't pay 10 bucks for coffee.

the culture is slowly coming to india, as people's time becomes more valuable in comparison to material goods. last week i paid rs 50 or so for coffee at a nice coffee shop where i went to meet an old friend. i think that's a fair price, and there is room for even higher prices in the market.

[skthewimp]

this won't work in Chalukya. they are just a restaurant which serves coffee; not a coffee shop. and they rely on an extremely high table turnover so they chuck you out once you are done.

but you're right - this culture is catching on in india. for example, I don't think cafe coffee day is a coffee shop - it's basically a place to just gen hang out. and also have coffee.

i'd written about this kind of stuff recently. and from the comments i got, it seems like in Europe (including britain), the price of a dine-in coffee is not significantly more than that for a take-away. which shows there's a good supply of public spaces (to hang out, etc.) there

what is the differential like in the US? between sit in and take away?

[arvindn]

well if you go to a normal coffee shop they just assume you're going to hang out so they charge the same thing anyway. but i think you can easily find take-out coffee for a dollar-fifty or two dollars.

[arvindn]

I would say negligible.(diff b/w takeaway and sit in's)
1.Locally Hot brewed coffee are cheaper everywhere.
2.Take-away chai's are around $2.7(tall) at Starbucks(where you can also sit down).To sit and have chai's are $2.5-$3.5.
3.Fast food coffee are even cheaper(McD's and others).
4.I feel prices in US are very regulated and most people don't pay for unnecessary hikes in coffee(like ccd's) unless it's really good & unique or if you want to be seen hanging around the place or you are in a touristy,Poshy place.
(PS:The prices might differ from region to region).

[anonymous]

1.I think the comparison might be uneven.I say the expenses incurred by Samrat to sustain their business in terms of maintenance,taxes etc is much higher than Adigas.Is Samrat like a attached restaurant for Chalukya lodging? --For me I'm unable to reason why Koshys's sandwich are way exorbitant(2.5 years ago) compared to say sandwiches in Jayanagar(except for the taxes)--any reasoning?.(which is kinda interesting as i suspect that costs are also priced proportionally to poshness of it's locale.)

2.Oops I forgot.Will add it later when i can recollect my reasoning.Maybe it was the competition between nearby coffee places/or Brand

[anonymous]

2.I would be hard pressed to price my coffees thinking that my customers are forced to have my coffee for whatever reasons.But if my shop is perennially crowded-I might consider a hike(as you have mentioned).If i have a brand name-again i want maintain some brand image--but i don't see this applying to regular coffee's at Samrat.All in all I'd would be curious to know why these questions arise in your mind

[anonymous]

Likewise i would not price my coffee based on seating capacity.

[skthewimp]

if samrat prices its coffee too high, people might stop going there altogether and tehy'll even lose out on tiffin sales

so they need to keep it high enough to make money but still "reasonable"

[anonymous]

Interestingly I was mulling over the price I pay at Adigas near Ashoka Pillar. I pay, albeit grudgingly, six rupees (which I feel is high) But given the quality of the coffee (for which I'm willing to pay only four rupees), and the cost of meandering towards the next available option, is high. More, there's a cafe coffee day right opposite. The very sight of this would make the six rupees (which adigas charge for the coffee in a tumbler) seem minuscule.

Now, as anon suggests, the land rates at the place where chalukya is located IS exorbitant, so there's some stuff there.

There's another reason, may be they wouldn't want people to come and have coffee there. They know if people come only for coffee, they would just loiter around and the price is to keep these "time pass" guys away.

(Say, friend, if you haven't read, you should read "Undercover Economist" by Tim Harford)

(Vishnu, www.sleepyface.blogspot.com)

[skthewimp]

i've read undercover economist. and loved it. and harford is now my favorite econ blogger

and even i'm a regular at the ashoka pillar adigas. and that guy usually makes the coffee too light so it isnt' too good. but if you ask for a strong coffee i think it should be good.

and yes - location matters a lot in pricing

[1pi00te005]

But the time thing is also important to your theory.

After all, at lunch time 90% of people will come to eat lunch and at 3 pm 90% will come for only coffee.