Release Date: 26/9/2014

Australian’s face the psychological $4 barrier


Quarterly results released by the Gilkatho Cappuccino Price Index TM indicate solid price rises in Melbourne and Brisbane contrasted by slowing prices in the other capitals.

Gilkatho Managing Director Wayne Fowler said whilst Perth still has the dearest coffee it was surprising to see that Brisbane was closing in. The ability of a consumer market to accept price rises reflects the buoyancy of consumer sentiment in those cities.

“Consumers are warming to the range of new coffee offerings that are coming into the market. Boutique coffee outlets offer more than a coffee. Often consumers can choose a coffee bean by provenance, read the history of the bean and enjoy the coffee in a unique atmosphere. All of the experience costs money to create.” Mr Fowler said.

“The cities in which we see slower price growth are cities in which we have also seen outlets closing. We continue to see business costs rising and this needs to be recovered through increased coffee sales. Where operators are unable to increase prices to make a reasonable return on investment, they exit the market.”

The results released for the second quarter of 2014 have shown that whilst Perth is maintaining the top position as the most expensive location to buy a coffee the Index has stabalised as it faces the $4 hurdle. Sydney once again recorded the lowest average price driven by plentiful supply of lower cost outlets contrasting with their boutique outlets.

“In the medium term of the next 18-24 months we are predicting that the Index will surpass the $4 mark in Brisbane & Perth. That will break a significant price barrier”, Mr Fowler said.

QUICK FACTS:

  • The Cappuccino Price Index (CPI) is independent research conducted by Gilkatho Pty Ltd that was first released in 2003.
  • The Australian Bureau of Statistics’ Consumer Price Index has recently gained access to the Gilkatho CPI to correlate with its own research data.
  • The CPI surveys more than 1100 coffee venues in Melbourne, Brisbane, Sydney, Perth, Hobart, Adelaide and Canberra.
  • The average coffee drinker who buys one cup of coffee a day spends more than the average weekly wage per year on coffee.
  • Gilkatho Pty Ltd aggregates results from the surveys to understand how the selling price of a cup of coffee changes over time.
  • Website: www.coffee-prices.com