With many Sydney and Melbourne cafes now charging $6 or more for a flat white with specialist milk, some are bucking the trend by offering coffees below $4 every day, running coffee “happy hours”, or doing flat pricing on all types of milk.

Mile End bagel shop in Melbourne is offering early birds $3 coffee (for any order) before 9am on weekdays at two of its locations.

At its peak, the deal attracted 300 extra coffee sales each day at Mile End’s Hawthorn shop, according to co-founder Ben Vaughan.

The happy hour price was introduced at Hawthorn (and more recently Brunswick) to promote the shop opening earlier in the day.

“We’re not making any money, which is fine; it’s a marketing tool for now,” Vaughan says.

“It’s no different to paying to boost a post on Instagram. We just want people to come and try us.”

At Piccolo Me’s 42 cafes scattered across Sydney, there’s always a happy hour deal on offer. It varies between locations but most do an afternoon special of discounted coffee and iced lattes.

Co-founder Charlie El Hachem says the daily discount is a way to get repeat business. It also encourages customers to buy something else while they’re there, such as a muffin.

“Ask any cafe owner: if you don’t have coffee volume, nothing else really follows from it,” says Adam Genovese of Genovese coffee roasters.

His family’s cafe in Sydney’s Alexandria was built with a stand-up espresso bar where, just like those in Italy, you can get a $2 espresso or macchiato. Italian cafes typically charge more for coffee if you sit at a table. Although it’s more about the experience than the price, Genovese concedes that it’s a good deal.

“It’s a very cost-effective coffee but still very well-made, compared to a $2 coffee elsewhere in the market.”

Cheap coffee has been a drawcard at 7-Eleven for more than a decade, but the convenience store is trying to attract even more coffee drinkers with the introduction of $2 soy and oat milk coffee.

Special milk dispensers are now in more than 300 shops across Victoria and New South Wales. 7-Eleven plans to get them into 400 locations across the two states by end of 2024.

The price ($2 for a regular size) is the same as 7-Eleven’s dairy-based coffees.

With estimates that between 25 and 40 per cent of people order or buy plant-based milk in Australia – and the cost of a plant-based milk coffee between 50¢ and $1 higher than dairy – the machines are attracting plenty of interest.

“We are seeing soy and oat milk options being nearly as popular as dairy-based coffee in many of the stores,” said a 7-Eleven spokesperson in a statement.

Melbourne cafe and coffee roaster Other Side has maintained a $3.40 price on its regular coffees, despite its competitors gradually moving closer to $5 and $6. It also doesn’t charge extra for alternative milk or extra shots. Other Side has opened two new cafes this year, with a third on the way.

How businesses such as Other Side and 7-Eleven are able to afford this is the big question.

Cafe owners spoken to for this story say alternative milks still cost more than dairy, especially for the specialty barista varieties of almond, oat and soy milk that have particular fat and sugar content so they froth well.

“It’s very hard for the trader to absorb the price of alternative milks. The price is still about double that of dairy milk,” says El Hachem.

Yet 7-Eleven appears to be absorbing the cost across its business.

“Our pricing is designed to allow us to have a standard price for all of our coffees based on size so the customer does not pay any extra for different styles of coffee or different milk types,” said a 7-Eleven spokesperson.

Their machines also use one of the less expensive brands of oat and soy milk.

Coffee vending machines – increasingly common around Sydney and Melbourne – are also competitive on price because they don’t pay for labour. A latte from a Flying Turtle machine, of which there are 50 in Australia, starts from $3.50.

Adam Genovese thinks happy hours and discounts are not necessarily going to drive down the price of a cup long-term. Instead, he views them as just another form of loyalty program.

The best way to save on a cup is still the most obvious: make it at home. With more specialty coffee beans now in supermarkets, the quality of what most consumers can achieve on a home machine is greater than ever. St Ali is the latest roaster to hit the shelves, joining Campos, DC and others.

Correction: an earlier version of this article stated that 7-Eleven offers $2 almond and soy milk coffees. In fact, it offers $2 oat and soy milk coffees.