Starbucks: More expensive than it already is…

Starbucks has been coping with the prices of raw materials and transportation until now by closing 600 of their outlets — they are not going to be nice this time. Starbucks stores in several cities, including Vancouver, are increasing the price of some beverages up to thirty cents more (depending on the drink; for example, frappuccinos or caramel macchiatos are being increased). But it’s not all bad, the company will charge less for the basic drinks; for instance, a tall black coffee.

There are two types of reactions from this devastating news.

1. Don’t care – These are the people who can’t live without having a cup of coffee every morning

2. Turn away – These are the people who don’t think Starbucks is worth its price and would rather save money buying from the supermarket.

3. Other

If prices grow, the demand for Starbucks will decrease because there are other competitors, like McDonald’s, who offer similar products for a cheaper value. Starbucks is considered a high quality and high priced luxurious item. However, as the US dollar value decreases, people are prioritizing their purchases thus a decrease in sales for Starbucks.

Nevertheless….

To counterattack the possible threats from increasing prices, Starbucks plans to redesign its menu and/or introducing alcoholic beverages. This may be a successful approach and may bump up the sales as it attracts consumers from other interests as well.

Personally, I do not favour Starbucks. I find that their drinks are too sweet and over all too much. I do drop by Starbucks if it is convenient ( since they do have a branch at almost every block of the city) however I prefer Bean Brothers. I wouldn’t say that I would never go to Starbucks ever again because of these slight changes in prices but I would go there less frequent than I already do just because Bean Brothers, for example, in Kerrisdale suits my taste buds (and also their portions seem a little cheaper if you compare the Starbucks cups per mL to Bean Brothers cups)

Sources

http://www.nytimes.com/2009/08/21/business/21sbux.html