Starbucks Plays with Prices



Starbucks Corp. is adjusting its pricing in several cities nationwide over the next few months, lowering the cost of smaller, more basic beverage choices and charging up to 25 cents extra for more complex options, the Wall Street Journal reported.


In some markets, customers will pay 5 cents more for a venti (large) cup of vanilla bean- or coffee-flavored frappuccino; 15 cents more for a venti mocha or vanilla latte; and 25 cents more for a venti caramel macchiato. An extra shot of espresso or dose of milk or syrup also will cost another 10 to 15 cents.


Meanwhile, customers will save 10 cents on a tall latte or cappuccino and 5 cents on tall hot or iced brewed coffee in some markets.


Starbucks announced in April that it would be adjusting prices. And recently, baristas at the chain received memos advising them to “expect customers to be sensitive to pricing changes in this economic climate,” The Wall Street Journal reported.


Baristas were told to inform customers that the price increase is due to the growing cost of doing business and that price cuts are meant to show the company is finding ways to provide value.


Due to the recession, Starbucks’ net revenue fell 6.6% to $2.40 billion in its fiscal third quarter ended June 28, from $2.57 billion a year ago, as same-store sales fell 5%. But the chain reported better-than-expected earnings for the quarter of $151.5 million versus a loss of $6.7 million a year earlier, the Wall Street Journal reported.


To assist unhappy customers, Starbucks told baristas they can use change from a change cup at the register to make up the difference during the first four days following the price hike.






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