The middle ground seems like business owners pricing their product appropriately to actually sustain their business. $2 for coffee seems ridiculously low. Is that normal in California? Maybe such under-pricing is part of the problem?
But McDonalds sells coffee for $1, and many of those customers who are deeply invested in living wages and local businesses are also not fools who can be charged 4x for the same thing they can get faster at McD’s.
So yeah, pricing is the problem, but IMO mostly on the “willingness to pay” side. These businesses are squeezed between the real costs of inefficient small biz (where are you going to store 50 pallets of coffee needed to get great pricing, and it’ll go bad anyway) and consumers’ unwillingness to pay for the things they say they want.
Same thing as airlines, really. Everyone hates cramped seats and coin-op toilets, but enough people will always buy the cheapest ticket that it’s not economically viable to provide a good quality product at a price that will sell.
People usually ok with having to suffer in cramped seats given that slightly less cramped seat price difference is often more than they earn in a day
Tangentially, I'm also curious how McDonald's in the US can charge $1 if they also have to pay a living wage. Does their size mean they get cheaper materials from suppliers and can drive costs down or that they make up that loss by selling some of their other products? I've never gotten coffee from McDonald's in my country, but I'm _pretty_ sure it's not that cheap.
Even _more_ tangentially, I noticed a popular local chain driving their prices higher and higher to ridiculous amounts. It's not even great coffee--it's like Starbucks in my country (Starbucks apparently didn't get a good footing here because this other chain is just so established). Their usually mediocre coffee costs more than one at a boutique high-end roastery! I suspect it's because they're pushing people to instead sign up for their monthly subscription, that lets you get a coffee every 2 hours. I've begrudgingly signed up, because I like using their cafes as a work space and this way I do not feel guilty about sitting around there all day. When I want legit good coffee, I still go to a good place and get one. As annoyed as I was to see how much they charge for a mediocre cappuccino, I've got to hand it to them on the interesting monetization shift.
They probably sell coffee at loss to upsell them on burgers
That kind of sounds like everyone involved would be better off if airlines were allowed to collude to raise the ticket price floor, but regulated to cap profits, forcing them to spend the gains on improvements.
McDonald’s is our society’s revealed preference.
That's nearly always the most important factor, and it always has been. But you also have to recognize that there are different markets even for the same product.
McDonald's is selling their coffee and pancakes to a customer base that is looking for a specific benefit: something hot, fast, low-investment and inexpensive that will fill their bellies on their way to do something else.
A business such as what nobleach is talking about isn't trying to serve people with those needs. It's satisfying a completely different set of needs: relaxation, a pleasant atmosphere, a place to pause for a while. Luxury. They'll want higher quality food and drink, an "experience", and such.
It doesn't matter that it costs more than McDonald's because both of those sorts of businesses are selling different things. Comparing them is apples-and-oranges. Isn't really about the coffee and pancakes.