Nick Mills: Would You Pay a Fuel Surcharge on Your Coffee

EDITORIAL:  Fuel prices are starting to quietly creep into everything… and I mean everything we do.  We always talk about it when we fill up the car — that’s the obvious one.   But what we’re starting to see now is the next layer of it… the ripple effect.  And it’s hitting hospitality, right where you notice it most — in your wallet, when you go out for a coffee or a bite to eat.  There’s a really interesting story out today from Radio New Zealand about a well-known Wellington spot, Smith the Grocer, down in the Old Bank Arcade. Been there or a long time, very successful, very well run cafe.   They’re not doing it yet — but they’re seriously considering adding a fuel surcharge to their prices.  And here’s why.  Their suppliers are already doing it to them.  One meat supplier has slapped on a 4 percent increase across the board.   Another is looking at about 5 percent temporarily. Eggs going up. Delivery costs going up. It all stacks up.  And when you look at the numbers, you can see why.   According to the fuel app Gaspy, 91 petrol is sitting around $3.48 a litre, diesel closer to $3.89.   These are real costs, and the flow is going right through the system — from the truck, to the supplier, to the café, and eventually… to you.  Now the café owner says they’d rather not do it — margins are already tight — but when everything goes up at once, they’ve got two choices: absorb it… or pass it on.  So here’s the question I’ve been thinking about.  If you walked into your local café tomorrow… and there was a 5 percent surcharge on the bill — not hidden, not sneaky, just clearly there because of fuel costs — would you pay it?  Or would you just walk out and go somewhere else?  Because I’ll be honest with you — I already do this in my own head. Every time before I start the show I go to 2 places to get my coffee  There are two coffee spots near me. One’s five bucks. The other one — the one I actually like — is $6.30. And every time I go there, I think, “why am I paying more?”… but I still do it. Why because I like the place and I think it’s better there.   So are we actually price sensitive… or are we habit sensitive?  If that surcharge becomes the norm — because let’s be honest, this isn’t going away anytime soon — do we just accept it?  Or does it start changing where we go, what we buy, and how often we go out?  That’s where it gets really interesting.  LISTEN ABOVESee omnystudio.com/listener for privacy information.