Coffee house rent extraction shock…

You might have thought that the staff serving it were the most expensive overhead but no, the graphic proves that rent extraction is really what commerce is all about:

and this is for a coffee company which seems to pay tax…


  1. Andrew -

    And as Richard pointed out some time ago over here – – the 38p figure for tax needs some explaining, as you would expect the output VAT on a £2.50 sale to be 42p on its own, plus some more for business rates, PAYE and NICs, and tax on everyone’s profit.

    Is it really much of a surprise that property and staff are the two biggest costs for a high street retailer, essentially selling flavoured water? It is the same for many businesses. But I doubt many coffee shops are paying 18p per customer for a cup, stirrer and napkin.

  2. Peter May -

    A very good point – as, after much of a lifetime in business, I fear I should really have pointed out!
    But I do think, to many (perhaps actually not now after all the retail failures) it may be surprising how much of everything goes in actual RENT, which is invariably money going upwards…

  3. B Gray -

    Of course the main impact of QE, as well as tax cuts for corporations and the rich, is to drive up asset prices, including real estate, and ultimately rents and your cup of coffee. Why bother investing in production, when you can siphon off surplus economic value in the form of rent in your sleep? After which you lobby for preferred tax status because you are a “job creator”. Problem could be largely alleviated by taxing rent seeking more and labor (and consumption in some cases) less; the opposite of what we do today.

    1. Peter May -

      Agreed entirely.

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