Archives Coffee House optimistic for future despite seasonality of business, impact of inflation
Thorson: $10,000 in gift card sales helped business stay afloat during slow summer months
GRAND FORKS — For Kyle Thorson, owner of Archives Coffee House, being located adjacent to a college campus can have its highs and its tough times. His business, now in its seventh year of operation, experiences seasonal shifts in demand.
“UND students are a major driver of business,” said Thorson. “Revenue tends to be highest when students are on campus. We definitely struggled this past summer — sales were down between 50 and 75% any given month. Add to that the fact that we were repaying COVID loans, and it was a rough go for a few months.”
In response to declining sales, Thorson said Archives launched a promotion in August encouraging customers to buy gift cards. Thorson said the promotion was well received.
“We were looking at our financial statements, and realized that we needed to do something to boost our revenue," he said. "We ended up making about $10,000 from gift card sales, which was crucial in getting us through the final weeks of summer and into the fall semester when students returned.”
Thorson said Archives is still offering promotions, such as giving its loyalty program members 20% off coupons, and holding a sale through the end of the week with all baked goods priced at $1.
Archives also recently obtained a permit to serve beer and wine, which Thorson says provides opportunities for a wider range of events in the evening.
“We’ve been having more live music and open mic nights,” said Thorson. “We also partnered with Milk Made Catering from Fargo for a wine and cheese night, which was fun. Our primary driver of business is still coffee, but the ability to serve beer and wine allows us to supplement our revenue.”
In addition to serving beer and wine onsite, Thorson said Archives has obtained permits from the city to serve these beverages at private events, such as plays at the Chester Fritz Auditorium.
Thorson says Archives will be partnering with local charities and nonprofit organizations in the upcoming months in the spirit of charity.
“We operate as a social business, meaning each month, we partner with a different nonprofit in the community to help give back,” said Thorson. “February is Giving Hearts Month, so all of our baristas will be able to choose a different charity that we donate to. I think there’s amazing stuff going on, and we are finally in a position where we can build our business again after some difficult months.”
Looking ahead to the upcoming year, Thorson says one of his biggest concerns is the impact of inflation, specifically the rising cost of bakery staples such as milk and eggs. The rising costs of these goods has forced Thorson to increase prices by about 25 cents per drink, something he says he wants to avoid in the future.
“When I first opened back in 2016, milk was about $3 a gallon, and now it’s common to pay over $4 a gallon. I just looked the other day, and I’m paying $5.69 a gallon for whole milk," he said. "I’m aware that college students are very price sensitive, so I don’t want to raise prices any more if I can avoid it, but it’s tough when you’re facing such a large increase in costs.”
Thorson said rising operating costs are particularly difficult to bear as a sole proprietor.
“It’s kind of scary as a small business owner,” said Thorson. “I don’t really have a fallback, as opposed to a chain like Starbucks that has many locations and can even out these changes across their stores.”
Despite the aforementioned setbacks, Thorson is optimistic that there is strong support for his business within the community.
“Assuming we can get our inflation concerns under control, I’m very excited for the year ahead,” said Thorson. “We’ve built some great partnerships with artists and musicians in the community for future performances. I also think students appreciate having a place to gather and study so close to campus, so I want to keep creating a space where they can do that.”