Coffee Talk: Booksellers on the Pros and Cons of Bookstore Cafés – Part II

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Last week, the owners and managers of six indie bookstores of varying sizes offered insights on their decisions to open or sublet in-store cafés, which range from simple espresso bars to full-service restaurants with a variety of menu choices and staffing needs. This week’s “Coffee Talk” focuses on how a café can benefit the entire bookstore, its effect on the bottom line, and whether – after tallying all the added responsibilities and costs – the booksellers still think adding a café was a good idea.

Drawing Customers In

All six booksellers agreed that cafés bring people into their stores.

“It has dramatically broadened our local customer base, and has brought in tourists who come in for coffee, but stay to buy a book,” said Mary Wolf at Collected Works Bookstore & Coffeehouse in Santa Fe, New Mexico.

For Prince Books in Norfolk, Virginia, the café serves primarily as a lunchtime draw. And at Liberty Bay Books in Poulsbo, Washington, the espresso bar brings people in for knitting groups and book clubs, as well as other events.

At Watermark Books & Café in Wichita, Kansas, owner Sarah Bagby said the café is important both to the store’s bottom line and to its role as a community place. “The café is an integral part of our business plan. We continually cross market,” she said. “Someone called the store the real city hall. The café brings in hundreds of people, and they buy books and coffee.”

A friend who once told Bagby that when she stops for lunch at Watermark “it costs her at least $50,” because she can’t resist browsing the shelves. “The café allows so many opportunities for social/community connection,” Bagby said.

Linda Barrett Knopp at Malaprop’s Bookstore & Café in Asheville, North Carolina, noted that providing additional services can increase a café’s effect on sales. “The café adds great energy and coffee aroma to the bookstore!” she said. “We offer free coffee cards for big purchases, which is always appreciated, and we offer free coffee cards to customers at our offsite book fairs. We have Wi-Fi in our café and three cyber stations, making it a great place to catch up online. It is also a nice meeting space.” The café and the bookstore are cell-phone free, “which preserves a peaceful, inviting setting,” she added.

Some bookstore cafés double as event spaces, while others serve snacks, wine, and coffee before and after events or draw a pre-event dinner or lunch crowd. The result is usually a significant increase in café sales.

“Whenever we have an evening event that starts at 7:00 p.m., the café [at Watermark] is full at 6:00 p.m. with people eating before the event,” said Bagby. “Then, depending on the crowd, they stay put or move over to bookstore seating.”

At Collected Works, “events generate a lot of food and beverage sales,” said Wolf. The café was designed to also serve as a small performance space. It has a small stage, used for author readings, in one corner. Folding café tables and chairs are easy to rearrange depending on the number of attendees expected at an event. For smaller events, Collected Works will remain set up café style. For larger ones, the café tables are quickly stored, and chairs are set up in theater-style seating.”

Wolf said that having a flexible café “means that we can (and have) hosted events with more than 200 people seated as easily as we can 20. We can make it look nice either way.”

When the café space is not in use, Collected Works opens it up to the community. “In the last year, we have had more than 30 nonprofit and community organizations use the café space for their own events – book-related or not,” said Wolf. “We’ve hosted everything from dramatic readings, musical performances, the Santa Fe mayoral candidates forum, fundraisers, local school groups, photography exhibitions, and on and on. We do not charge anything for use of the space.”

The café at Malaprop’s “is mixed-use.” said Barrett Knopp. “We have to move out the café tables for big events, and can fit 100 seated people in the café. We can fit more if we move our rolling bookcases from the front of the bookstore.”

The Bottom Line

Although cafés are a draw are they worth all the additional ordering, staffing, organizing, and stressing?

Bagby gave an almost resounding “yes.” She believes that the Watermark café is worth the extra effort and has a synergistic effect on sales, but, she stressed, it does require a lot of supervision. “There is a better margin in the food hospitality business, if it’s managed correctly,” she said. “The café is 30 percent of our business, and the margin is better than on a discounted bestseller.”

One of the biggest benefits is that the café adds to the unique appeal of the bookstore. “There is no other business in town that is like Watermark Books and Café,” Bagby said. “And neither business would be as vital without the other.”

Chuck Robinson said that the two cafés at Village Books in Bellingham, Washington – the Colophon Café and the Book Fare Café – have steadily grown bookstore sales without any direct expense, since Village Books subleases its cafés. “In 1985, the year we first added the café, our business had been up slightly over 10 percent for the first half of the year. After adding the café and only a slight increase in space for the bookstore and almost no inventory expansion, our business was up more than 40 percent for the second half of the year.”

The independently run Lizard Café at Prince Books made economic sense for the bookstore and was worth whatever additional time it required, said owner Sarah Pishko. But, she emphasized, “I get rent and don’t run it.”

Liberty Bay’s Suzanne Droppert said that initially the café significantly increased sales, but after a second coffee shop opened next door, it’s “not a huge money maker.” There are “too many close coffee shops with all their specialty drinks.”

Wolf said the addition of Collected Works’ café was “definitely worth it,” although she wasn’t sure how much of the bookstore’s sales increase was due to its recent relocation and other factors, and how much was attributable to the café. “However,” Wolf said, “anecdotally, I can say that our customers rave about the changes that we have made to the store, especially the café. And even in a terrible economy, sales are up.”

Advice and Café Caveats

While most of the booksellers have seen profitability increase after the addition of a café, not all of them enthusiastically recommend adding one.

Robinson said that he wouldn’t recommend opening a bookstore café to everyone. “It would be highly dependent on the situation,” he said. “In 1985 bookstore cafés were the ‘next great thing.’ That may not be so true in 2010. I’d look around to see what might be today’s ‘next great thing.’”

Unless a bookseller has extensive restaurant/café experience, Robinson recommends leasing out the space or contracting with someone to run the café, and then working closely with the café operator to cross market the two businesses. “We did this more successfully with the first café than with the second,” he added.

Bagby would recommend opening a café to other booksellers, but “with the caveat that adding a café is hard; the work load is very different than running a bookstore; and there are lots of ways to succeed … and fail. I could go on with many, many reasons why someone might not want to add a café,” she said, “but I would not go back.”

Enlisting a bookstore-café mentor is a sanity saver, Bagby said. “Make friends with someone in the food business to call on for advice on equipment, service people, etc.,” she advised. And, of course, serve something tasty. “Make sure you have at least two ‘signature’ items on your menu,” she said. “We are known for our tomato bisque soup and our turkey sandwich on homemade focaccia with apricot mayonnaise.”

Barrett Knopp suggests that potential café owners start small. “I would advise against being too ambitious regarding menu choices,” she said. “Keep the café simple and at the highest level of quality food and customer service. We once served delicious meals, but the full menu was ultimately too costly for us to maintain, despite heroic efforts.”

Running a café “offers greater managerial challenges than a bookstore because you’re juggling so many part-timers in a schedule,” Barrett Knopp said. “Our baristas are great and committed to quality, but they also have a lot of other things going on in their lives so they are less flexible in their schedule availability, and they also transition out of their jobs more quickly than our booksellers.”

At BookSmart in Morgan Hill, California, co-owner Brad Jones said that a large part of the decision to open a café “depends on location, experience, etc.” He suggests booksellers keep it simple, buy used equipment, and hire a consultant to help with the launch.

Prince Books’ Pishko cautioned, “If you choose not to lease out space to someone else, it’s a big time drain for you. There are different issues: Health department. Higher worker’s comp for café workers. Meal taxes. Different sorts of employees. Equipment! Ice machines, ovens, coffeemakers – they break all the time.”

Droppert suggested that booksellers consider the neighborhood and proceed with an espresso bar “if there are no other coffee shops close by.” To those who are determined to become a café owner, she counseled, “Run the numbers many, many times.” Droppert is also in favor of subletting the space to an existing coffee shop.

Wolf enthusiastically recommends including a café, but like many other booksellers, stressed it was a “big undertaking.” Running a café was “not as easy as we thought it would be, and it’s not a guarantee of success,” she said. And, coffee habits are hard to break. “We have a Starbucks about two blocks away, and it’s not easy to compete against that. Even if our coffee is better, less expensive, organic, locally-roasted, etc., etc., it’s a challenge to retrain people and change their morning routine.”

To help counter that challenge, Wolf said, “Make sure your coffee is good! Choose a provider that offers a great product. Choosing a local roaster was a huge win for us because they are really invested in our success. They were hugely helpful with the logistics of setting up the café in the beginning: They helped us with all of the machines and configuration, and threw in a lot of freebies because we use their coffee. Because we went into this knowing nothing about the coffee business, their help was (and still is) invaluable. If something ever does go wrong, I know I can call on them.”

Wolf’s other tips: “Offer free wireless. Work very, very closely with your health/environmental department before you start. We also showed our plans to the local health and environmental inspector, who made some very important changes before we even started – changes that saved us a lot of money in the end because we didn’t have to fix our mistakes!

“The health department process took a lot longer than we thought it would, and I wish we had started with them earlier than we did. They turned out to be an amazing resource. The inspector looked at plans with me, advised us on issues from plumbing to refrigeration to layout. By the time we were ready for our inspection, we already knew that we had everything done properly.”

Budgeting for an entirely new business, especially one contending with perishable items, can be anxiety inducing. Wolf and Bagby both emphasized the importance of talking with others.

Wolf said, “We started out by thinking from the customer standpoint, imagining what we wanted to have our coffee shop look and feel like. We visited all of our local coffee shops, independents and chains. We made a lot of notes about what we liked and didn’t like.”

Once Collected Works staff did their homework, they consulted with others. “We met with the coffee roaster we liked the best, and described what we were going to try to do,” said Wolf. “He gave us a lot of help, including recommending pricing and estimating cost and margins on drinks. He also offered us good deals on equipment, and he threw in a lot of things for free because he wanted our business.”

The coffee roaster then recommended a local restaurant supply salesman. “We worked closely with two valuable resources: the local coffee roaster who had experience supplying other new startups in the area, and a restaurant supply company that also had worked with many startups in our state,” said Wolf. “These two vendors were very helpful, giving us great advice about how to plan and budget a coffee shop. They gave us free advice about initial expenditures (plumbing, water filtration, electrical, sinks, bathrooms, etc.), equipment (necessary vs. nice-to-have, used vs. new, purchase vs. lease, etc.), menus, coffee shop layout, estimated sales volume, etc. They were a big help. Between the two of them, we got a very clear idea of how much we would need to spend just to set up the business to begin with.”

Collected Works’ other strategies included making lots of lists and buying a lot of things in bulk.

“We try to remember that the coffee shop’s primary purpose is to add value to the bookstore – to increase the overall revenue, even on the days when it doesn’t turn a profit,” Wolf said.

Finally, Wolf issued an invitation for booksellers: “Come visit us at Collected Works Bookstore and Coffeehouse!” She also offered bookseller-to-bookseller feedback. “We’d be happy to talk to anyone thinking of adding a café to their bookstore. Free advice: worth what you pay for it!”

To read the first part of Coffee Talk, click here.