Consumers should pay more for a cup of coffee, Flight Coffee company managing director argues

Flight Coffee managing director Richard Corney argues consumers should be paying more for their cup of coffee, as hospitality offerings across the Wellington region and the country struggle to stay afloat.

Venues in Wellington are weighing up raising prices, potentially cutting hours, or even shutting up shop as costs rise.

Corney believes the current climate in hospitality is worse than it was during the pandemic. In an interview with NZME, he said “it’s very grim at the moment”, with the company 25% below its expectations in July.

He says if the price of a cup of coffee increased at the rate of operating costs, they should be charging $8 a cup.

The Hangar on Dixon St, Flight Coffee’s flagship store, raised its price of a regular dairy milk white coffee to $6.10, with a black coffee setting a customer back $5.60.

The cafe, which is celebrating its 12th year of operation this month, has seen a 134% spike in rent since opening. Wages have also increased; the living wage, which it pays, has gone up 106% from its opening year of 2012.

Corney said the current climate was representative of similar times in 2008 – when the world was in the midst of a financial crisis.

“It’s a near-perfect storm at the moment,” he added, saying the impact of public sector job losses on the industry has been acute. “You’ve got the cost of living, you’ve got various other pressures with higher interest rates and people being very conscious of discretionary spending. For hospitality, it’s culminating in ... people just not spending like they used to.”

Other businesses in central Wellington have faced a slump in spending – some of them having to say goodbye to the capital and business as a whole. Thousands of public servants, a majority of whom call the Wellington region home, have lost their jobs either through layoffs or voluntary redundancies in a mass cost-savings effort from the Government.

Data as of June shows food price inflation is slowing; though global coffee prices are on the rise worldwide, prompting cafes to make difficult choices.

Rising shipping costs and global weather conditions have also put pressure on the prices of coffee. The Financial Times reports Nestle chief financial officer Anna Manz telling investors the costs would have an impact on profits for the next six months or so.

Azaria Howell is a Wellington-based multimedia reporter with an eye across the region. She joined NZME in 2022 and has a keen interest in city council decisions, public service agency reform and transport.