Hybrid and remote work continues to take its toll on the once-booming office food trade, as companies eagerly await whether habits have finally changed.
More than two years after the great office exodus, cafes, sandwich and salad bars are reporting trade in once-thriving places has fallen by as much as 60 percent.
The news comes as “lunch inflation” has pushed up the cost of ingredients for lunchtime staples, including salads, meat, grains and vegetables, along with packaging, labor and energy costs.
Brian Lee, the owner of Chopped, which has 50 locations nationwide, said it was “shocking” that its Grafton branch in Dublin remains 60 per cent below pre-pandemic levels.
“If this continues, the whole landscape will change,” he said. “We are nowhere near where we were in pre-Covid-19 office locations. We’ve seen a jump in the past three weeks, but it’s definitely not anywhere near what it used to be. Also, shoppers aren’t going downtown like they used to.”
Most companies have taken a hybrid approach — one, two, or three days a week — but flexi-working means many choose Mondays and Fridays as their home office days.
“Business slows at the beginning and end of the week because people choose Tuesday through Thursday as their days to come into the office,” said Mr Lee, who will consider moving some stores to residential areas, “when sales none reach a certain height”. The office world has changed permanently, “but at what level it arrives remains to be seen”.
The cost of living crisis is also hitting home. “I don’t know of an ingredient that hasn’t gained weight,” Mr. Lee said. “Chicken goes through the roof. Grains, nuts, even lettuce leaves are on top. The packaging costs are crazy too. Shipping a container from the Far East for bags, disposable gloves and cutlery used to cost 3,000 euros. Now it costs 15,000 euros.
“No one wants to raise prices, but with rising labor and energy costs, it’s ‘squeeze, squeeze, squeeze’. It would be nice if consumers understood the strain business owners are under.”
Keith Ryan, owner of coffee and sandwich bar Boca at Dublin’s IFSC, said his business has returned to 70 per cent of pre-pandemic levels, a big improvement from trading earlier this year. “In January, business was 90 percent below pre-pandemic levels,” he said.
Employees at its largest client, PricewaterhouseCoopers, recently returned to the office three days a week. However, he also noted an increase in costs. “Emails come in every day. Just yesterday I was told the cost of bread will go up 10 percent, the day before there was a 10 percent increase on our coffee, a 15 percent increase last week on milk. It’s constant.”
James McCormack, the owner of the Dublin Barista School, which has a cafe on South Anne Street, was selling more than 500 cups of coffee a day but says sales are down 50 per cent.
“In the last year, coffee as a commodity has increased by 80 percent,” he said. “Some coffee roasters will have their prices hedged – I’m glad we did that here – but the price of coffee will have to go up in the short term for those who haven’t. A flat white that might cost €3.30 or €3.60 could go as high as €4.
“We still have morning rushes but with fewer people. Davy Stockbrokers is one of our largest clients. There is more flexible work – some of these people work two to three days a week and in some of the buildings around here many work from home four days a week.
“Some of the guys at Davys used to buy three coffees a day and now they maybe cut it down to two or one. It is very cautious about how consumers will react. Everyone feels the pressure and there is fear of the unknown.”
Alex Bruce, owner of Soma coffee chain in Cork, notes how trade has affected the office district.
“We have three cafes, two in town which are busier and one we opened on the black market [a new development of food stalls featuring local produce]which is more office-based.
“It’s not as busy now as our premises in the city. If we could get more people back into offices it would be a huge help to the business.”
Despite rising costs, Mr Bruce hopes customers will continue to pay for small luxuries. “We roast all of our coffee ourselves, so the cost of our raw material, the green coffee beans, has increased by 20 to 30 percent. We only increased the price of our coffee by 10 cents to cover our costs.
“Whatever happens in the world, people spend around €3 on a cup of coffee or other small treat they enjoy during the day to make life a little easier. But of course nobody wants costs or prices to continue to rise.”
https://www.independent.ie/business/personal-finance/heading-back-to-the-office-costly-flat-white-could-leave-you-feeling-flat-broke-41650778.html Back to the office? Expensive flat white could make you feel broke