By Stacy Bradshaw
Ever wonder why Canadians are so obsessed with the price of gas? With
signs at every corner and news reports heard every hour, we are
constantly being inundated with changing prices, leaving us both
hyper-aware and hypersensitive.
Ever wonder why Canadians are so obsessed with the price of gas? With signs at every corner and news reports heard every hour, we are constantly being inundated with changing prices, leaving us both hyper-aware and hypersensitive.
We are all compelled by some psychological disposition to find someone to blame for these outrageous gas prices (see “Where do prices come from?” p.26). The OCS and Vending industries particularly, have been hit hard.
But whether the rising prices of such commodities are warranted or culturally fabricated – whomever it is you want to blame – the fact remains, they affect your bottom line and you do not have to be the only one swallowing the costs.
A slew of other consumer purchases have gone up just as much, if not more, than gasoline. Consumers have come to accept a new reality where everything from their car insurance to the price of a good cup of coffee has risen.
Our readers need to start taking advantage of this new consumer mindset. Recall last month, when coffee prices began to creep upward and the only blame we could assign was to Hurricane Katrina.
Some weeks after Katrina tore through one of the biggest waterfront warehousing areas in the United States, massive coffee supplies, feared to be damaged by floodwaters, were deemed safe and a crisis appeared to be averted.
And so, just as Canadians have accepted that gas prices slid “down” to around the one-dollar mark, the coffee industry has to be content with the fact that coffee prices are stable at around 95 cents.
Katrina’s reminder of the fragility of our market means there should no longer be a question of whether or not to pass these increases onto the customer, but when and by how much.
If we want to banish consumers’ perceptions that Starbucks and Tim Hortons serve a better cup of coffee, then we have to price accordingly. Vending does not always have to be the low-cost alternative – it doesn’t reflect the quality of the product our operators are serving.
The industry has dedicated itself to advancements in machinery and product, and deserves to be reimbursed for those efforts.
Take these rising costs as an opportunity to get more money for your product. Increase cup sizes and start charging a premium price for your premium product.
Every account is different, so approach your clients accordingly, using the tactics you feel they will best respond to. For some clients, it may be as simple as, “my costs are up.”
After all, business is business, and while others are actually benefiting from the recent barrage of price hikes, vending remains barely treading water, too apprehensive to swim over that $1 barrier.