Cup of coffee hitting close to $6 in some parts of NZ

Source: 1News

Hold onto your lattes, the price of a cup of coffee is reaching new highs – close to $6 in some parts of the country.

Cafés, already suffering from a lack of customers, are feeling the pinch and are reluctantly raising prices.

Flight Coffee managing director Richard Corney says rising labour costs, rent and inflation are all factors.

Coffee is going up 50 cents a cup at its Hangar café in Wellington– so a flat white's now $5.70.

"We are hearing a lot of talk around the $7 flat white, that's what it should be in real terms, but the market will find a middle, for us this just represents what it needs to be in order to have a sustainable business."

Another café owner, Jimmy Phan, has raised his price to $5 for a flat white.

"The coffee beans increased in December, milk has increased two to three times since we opened."

One coffee roaster calculated the costs of a $5 to $6 cup of coffee as nearly one-third labour, 29% milk and beans, 14% operating costs, 11% taxes – leaving cafés with 15% net profit.

Economist Chris Tennent-Brown said it was a tough equation for cafés.

"We've been stuck at home and they probably really like to drum up as much business as they can and not lose customers with putting up prices."

1News asked people overseas what they pay for a regular flat white.

New York and Singapore were the most expensive at about $6.50.

In Tokyo, London, Melbourne and Toronto, it's past the $5 mark.

But in Colombo and parts of Spain, you can still pay around $3.