Why a cup of tea at an airport is costly?
remains one of the most wanted and commonly consumed beverage across the world and so does coffee. The flavor, content, type (hot/cold) and the quality could differ and similarly the price. In India, you can get a cup of coffee for 3 INR on a road-side tea-shop and for 50 INR at airport, malls, or other posh areas. The difference is taken as okay and people don’t usually complain about this price difference.
However, I am always curious to know why people charge more for tea, when it could be lesser and would allow more people to enjoy it.
This article was prompted by my recent visit to Indira Gandhi International Airport, New Delhi. I was taking a flight to Chennai and had started from my home in Gurgaon at 3:00 AM. An early-tea taker, I was looking for some sips when I noticed that a shop was selling tea for 50 INR. I was a little taken aback with this price because other items were relatively cheap. Say for example a burger from McDonald. They sell a burger for 25 INR excluding the taxes, which comes to be around 2-3 INR. Now, we know that costs involved in a burger are more than the costs involved in preparing a cup of tea, provided not very high quality tea-leaves are used. I had to pay 50 INR as I could not resist my hunger (not thirst) for tea.
As I boarded a SpiceJet plane, I was again looking for some refreshments. Along with something vegetarian, I asked what they offer as hot beverages. The air hostess replied that they had tea/coffee. The price? 30 INR along with a pair of cookies! You could ask for another pair of cookies and they won’t refuse. Why this difference? It is clear that serving a cup of tea/coffee on-board is difficult as compared to serving it on land in a shop. Why the shop people charge almost double the price?
It is not a complaint by a tea-lover or fanatic but a serious issue that entrepreneurs can think to explore and solve.
McDonald and KFC both have come up with lower price options for their customers and we all can see how popular those products have gone. Why somebody can’t try it for a cup of tea. Why you charge more when it should be cheaper. Is there somebody who could explore the entrepreneurial opportunities offered by airports and other posh areas?
Why so? It has many facets. They know what people want badly(and hence won’t mind paying huge amounts). Fact being used to earn money. If there would be an off-season for it you’ll get it cheaper. One more fact is about style/level quotient. This you can very well see in shops like CCD and even applies to airport!
@AnujaK
Yea, I will agree to that, Anuja…
the cost of rentals in airports is higher to the level of being insane..and comes with lot of punishing clauses incase of non payment of rentals and also requires the retailer to put in a lot of money in creating the airport ambiance in his airport shop…all this leads to increase in the overall set up cost and risk…hence even a cup of tea or coffee is charged lot more than it should be…so that a retailer can at least pay the high rentals and salary… its tough making money out of an airport shop and i believe its more a branding method for your main retail outlet in the city…
But the fact is charging heavy prices at airport shop would not at all do ny branding. This will create a bad image in the minds of the consumer that this retail; outlet charges exorbitant prices for a 5 INR cup of tea.
Well, yes. I would agree to your views, Nikunj. Tea, unlike coffee, should have lower price even if it is served at an airport given that the airlines are serving it while you are close to 36k feet up in the air.
Same is the case with INOX and other move theaters where they charge exorbitant prices for something that is not even 1/5 worth the price of it.
They just exploit status concious mentality of people who can even pay Rs 500 for a tea in 5 or 7 star restaurants though tea costs Rs5 in a dhaba tastes better than that. 1 more thing is that there is a fad among some that costlier is better. But because of these two type of thinking they charge more and victim is always middle class section of society.