Espresso stand suffers as drinkers cut back

It’s a tough time to be selling lattes.

Long the target of frugal-living gurus, espresso drinks have risen lately to the top of seemingly every list of money-saving tips out there. Put Google to work on the subject and you’ll quickly find that cutting out lattes is the way to “Scrimp and Save During An Economic Recession,” “Survive a Recession” – even “How to Pay for Private or Catholic School Tuition in a Recession Economy.”

“I don’t like to see that,” said Julie Mulvania, who owns Oasis Espresso with her husband, Ken. “But I see it all the time.”

The Mulvanias have seen their business at the drive-through coffee stand at Francis Avenue and Lee Street drop this year by somewhere between 6 percent and 10 percent. It’s been a hit, but they’ve tightened their belts and kept six employees on the job.

The drop in business illustrates one of the ways that individual decisions affect others throughout the community and economy. Stacia Douglas, an employee at the Spokane VA hospital who was profiled in the last installment of this series in August, has made a point of becoming more frugal. Among her changes: cutting out latte drinks and switching to regular coffee. She wasn’t the only one, as the Mulvanias have seen.

Then, two weeks ago, a robber hit the coffee stand. The man, wearing a ski mask, flashed a gun and demanded cash before fleeing. There was surveillance video of the robber, but he wasn’t identifiable and there has been no arrest. The Mulvanias feel lucky no one was hurt and not much money was taken.

“It was 5 in the morning, and we don’t have that much cash to start with,” Ken said. “He was coming at 5 in the morning before our first customer got here.”

“I think he was our first customer,” Julie said.

It could have been much worse, of course. In its own way, Oasis Espresso became a small reflection of the economy at large: Coffee’s down, crime’s up.

Cutting back

The Oasis robbery was one of several coffee-hut robberies in the space of a week in Spokane and Coeur d’Alene. This year, police agencies in the region have seen increases in petty crimes such as burglaries, robberies, car thefts and break-ins and shoplifting, according to statistics reported during the first several months of the year. Efforts to get more recent statistics from the Spokane Police Department were unsuccessful last week.

Ken Mulvania’s mother started Oasis Espresso 16 years ago in a paved lot next to G&B Grocery’s parking lot, with two drive-through windows and a small covered porch in the front. “I originally built this building, way back when she opened it up,” Ken said. “So I’ve always had a connection to the place.”

Ken and Julie took it over about two years ago. Both have day jobs – Ken does project estimates for R&R Heating and Air Conditioning, and Julie works in accounting at PAML medical laboratories. The coffee stand provides extra income for them and their two daughters, ages 12 and 15, but it isn’t the mainstay of their economic lives.

They have six employees. They don’t work the windows much themselves – Ken quickly discovered that it was more hassle than he was up for. “I learned right away it wasn’t something I’d want to do full-time,” he said. “It’s a lot more complicated than you might think.”

Business was pretty steady during the first year or so but has tapered off this year, the Mulvanias said. They’ve responded by trying to cut costs – including buying their milk from Costco instead of a local wholesaler. Saving 50 cents a gallon is no small consideration for a business that sells mochas and lattes.

‘Fight for every dollar’

National statistics show that consumption of espresso and gourmet coffee drinks has indeed dipped this year – but not by as much as you might think. The percentage of adults who said they had a gourmet coffee drink each day dropped from 17 percent in 2008 to 14 percent in 2009 – the same percentage reported in 2007 before the economy tanked. And the overall number of people who said they drink coffee every day stayed roughly the same between 2008 and 2009, at 54 percent.

Oasis barista Angela Kelley said she’s seeing more customers ordering drip coffees and cheaper options, though the most popular drinks are still the mocha and the vanilla latte. She said the busiest times of the month are the first and 15th, when people treat themselves on payday.

Despite the recession, the Mulvanias see new competitors springing up. The business keeps them busy outside of their jobs – Julie gets off work mid-afternoon and often stops by the coffee shop to take care of things. Ken stops by on his way to work from their home in Deer Park.

“A new place just opened on Nevada,” Ken said. “There doesn’t seem to be that much money to be made, but more and more people are starting to get into the business.”

“You fight for every dollar,” Julie said.