In downtown Palo Alto, one is never too far from an ice cream parlor. There are 11 ice cream shops in Palo Alto alone, and competition is stiff.
The ice cream business is fierce. Dairy prices tend to fluctuate, affecting the cost of ingredients. The market is also highly seasonal, so stores open year-round must weather the winter.
Also, as the specific ingredients for each flavor differ, so do profit margins for each flavor scoop. Some ice cream shops in Palo Alto, like Tin Pot Creamery, solve this issue by charging more for “premium flavors,” like Tcho Chocolate Chip.
Scoop has the most expensive single scoop in Palo Alto, while Peninsula Creamery Grill and Dairy Store has the cheapest. Rents are high in Palo Alto, and shops like Baskin Robbins have increased the cost of a scoop at a rate of 10 cents a year to keep pace with their rent increases of 4 percent.
