As you may have noticed, we changed our hours in April so we are now open until 2am every day of the week. We were already open until midnight, so I think this moves us up the ranks of ‘latest place to buy fresh produce in Hyde Park’ from 1st place to…1st place.
But, a question we get all of the time from regulars is “is it worth it to be open that late?” Of course, before we tried it we had only an educated guess. But now we have some data we can look at to evaluate whether we should keep these new hours, or whether this has been a disaster and we should scale back. The answer to that, and more, below:
The first thing we did was to calculate how much staying open will cost us. Most of the cost is labor, and that’s about $20 for the two hours, all told. Roughly speaking, that means we need to sell about $100 extra to stay open two extra hours (because we have to pay about $80 to replace that food we sell, and then we have $20 to spend on labor).
As a first pass, then, if we sell $100 between midnight and 2am, it is worth staying open.
But we had another worry: what if some people come to the store “right before it closes” regardless of what time that is — some people who were coming at 11:45pm might now come at 1:45am instead, so while our super-late sales might grow, they could be cannibalizing our sort-of-late sales. So we developed a metric we wanted to track, and we called it “sales after 11pm”. That way if sales moved from 11:45pm to 1:45am, we wouldn’t mistakenly think that was growth — as long as total sales after 11pm went up by $100, we would be good.
Our lovely intern Patrick whipped up a graph of this “sales after 11pm” metric. Here it is, with a one-week averaging window to smooth things out. October 2009 is when we changed our closing time from 11pm to midnight, and April 15th 2011 is when we changed from midnight to 2am.
Sales after 11pm
Looks like our after-11pm sales went from about $100 to about $250, or a growth of $150. That’s $50 over our break-even point, so definitely not a disaster, and being open late makes customers happy and helps us turn produce over faster, so there are lots of positive side-benefits. After taking everything into account, it probably adds $300 to our bottom line every month (which is good, because our bottom line can use all the help it can get).
Conclusion #1: Yes, it’s worth it for us to be open till 2am.
Of course, there is never a dull moment around here, and Hyde Park is quite a seasonal place. While only about 30% of our customers are students, a disproportionate number of our late-night customers are. So as the U of C goes into break and then its slower summer term on June 10th, we’ll be continuing to track our after-midnight sales and may have to adjust if the new data shows we are loosing money.
Conclusion #2: If you like our new hours, the best way to ensure they stay around is by voting with your feet!