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Efficient markets meet efficient yogurts

March 7, 2011

At the behest of his daughter, Rocky sampled his first “Pinkberry” frozen yogurt in New York City’s Greenwich Village on Sunday. Pinkberry has a cult following, and it was time for Rocky to audition for the cult.

The small cup of plain with two toppings cost $6.25 — and while Rocky found the concoction uninspiring — he found the profit potential intriguing.

An unscientific 10 minute demographic survey revealed all of the customers in the store were ultra-skinny women under the age of 30 and just one skinny man (whose attire and makeup were sexually ambiguous.)  Judging from their fluency in Pinkberry nomenclature, all were regular customers. The tiny store was grossing over $300/hour — on a cold, rainy March afternoon!

Rocky started salivating. Not from the yogurt. From the profit potential!

But before he could grow lascivious about live cultures, Rocky looked out the window and noticed two stores across the street with “Opening Soon” banners in their window.  Red Mango and “YourGurt” had Pinkberry’s prodigious profits in their sights.  A frozen yogurt war would soon commence — and monopoly yogurt profits would undoubtedly become the first casualty….

[Disclosure: All that glitters isn’t gold, and all that shines isn’t Pinkberry pomegranate with strawberries. But the jingle is worth a listen: click here. ]

  1. Sam
    March 8, 2011 at 9:12 am

    We’ve noticed the yogurt chain bubble inflating around here as well. Roughly one yogurt store per block. All the stores are in the 1-2 year range. Word on the street is the only ones profiting are the franchisers.

  2. masteroftheuniverse
    March 8, 2011 at 8:21 pm

    I can’t blame anyone for opening up a frozen yogurt place. Those places usually have a gross profit of over 50%, less shrink. The only problem is that the average sale/item is pretty small, compared to a pizza place, which offers an average of 60% gross profit and a bigger ring. A pizza place might only need 40 checks to be the equivalent of 300 at the yogurt place. Still, the yogurt place is a cheap business to get into.

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