Cafe business with competition from staff canteen

M

MarySmyth

Guest
Friend operates small cafe business in healthcare environment-

Staff canteen has significantly lowered its prices and major drop off in cafe business over past 4 weeks.

What to do? Example in canteen bottle of coke 1 euro; wrap with single filling 1.60 euro; etc

cafe charge would be 1.50 for coke; 3.40 euro for wrap with 3/4 fillings, etc.
 
The knee jerk answer is to lower prices to compete. However, you friend may also go out of business doing this.

How about offering something different? like thick Spanish chocolate, or fancy coffees, frapes etc, lovely cakes.
Consider introducing a loyalty card.

or a two pronged attack - below cost stuff (cheap coke and basic sandwich - budget meal) but also the fancy option. Try to upsell once the punter is on the premises.

Also offer free wifi, or other incentives that wont cost you too much.
 
How did she come to set up the café? Is it a franchise from the health care provider who also owns the canteen? If so, did she have an agreement on pricing or competition?
 
Find out if its being subsidized and complain.

By definition it seems that she's there to offer an alternative.

Go the value-added route as opposed to a price cutting route.
 
Is it the case that this is a café in the public area of a hosital or something like that and there is also a canteen for staff in the same premises (accessible to staff only?). So the target market is patients and visitors to the hospital and staff working there who might prefer a change of scene from the canteen?

I don't think you'd get anywhere complaining about subsidization - if applicable - of the staff canteen to be honest.
 
Hospitals have to justify their costs and below-cost selling being subsidized by the hospital budget might be an issue for some - if that is what is occurring.
 
Subsidized staff canteens are a common and totally legitimate perk for some workers in some workplaces. If this is the case here then it is a non issue as far as the original query is concerned in my view.
 
Cafe

Thanks for suggestions- yes subsidised canteen is legitimate and cafe rent is subsidised sp cannot complain!

What would recommendations for a good offer be?

Also, what is a good loyalty offer - i see some take 10 purchases to get something free- which appears to be a bit mean!
 
MarySmyth said:
Thanks for suggestions- yes subsidised canteen is legitimate and cafe rent is subsidised sp cannot complain!

What would recommendations for a good offer be?

Also, what is a good loyalty offer - i see some take 10 purchases to get something free- which appears to be a bit mean!
Click to expand...

You're the business woman Mary.
What about a deal on snacks to eat with your coffee?

Do the math and see what might work, given your current turnover.
Just offering a deal - any deal - will attract "some" customers to your door.
 
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