It is associated with the fall in long-run average costs due to the rising number of coffee drinks sold. Costa will be purchasing more coffee beans, sugar and related types of equipment in a bigger scale. This will place them in a better position to negotiate for discounts. Also, it is now much easier for them to borrow a larger sum of money to expand their operations (if they want to). Banks will normally charge lower interest rates due to a solid financial position and better ability to repay. Coffee house with no significant reputation will find it difficult to raise cash. Banks will demand higher rates for the risk they assume