Are customers saying anything about the price changes?

The price changes that have been discussed on this site have now been made public via a Wall Street Journal article. Any reaction? Read "Starbucks ups price on elaborate drinks" and "In a recession risk, Starbucks raises some prices" || Jump to the second page of comments.

Comments

[Oversteamed, no melon, no water GRTL]

This is the 2nd time in less than a year that the prices of items have changed at my store. They first skyrocketed now actually they are lower. If I was a customer (and when I am not working believe me I am) I would be extremely fed up. Not only at the poor decisions with coffee and brewing and labor, but with the seesaw prices. Cannot someone in corporate make up their mind. It's extremely bad press to say, ok your going to have to pay 25 cents more per cup for your beverage for 4 months only to reduce it by 15 cents. Customers are going to like the decrease I guess (although not back to original prices on some beverages) but they are going to be left extremely confused and upset that for 4 months they had to pay all that extra. I can see some even demanding a refund! And we get a one page sheet on what we are supposed to say to the customers and bear the brunt of their wrath. Thanks!

[tivoboy]

yeah, pretty annoying, .10$ on grande coffee and .15$ on venti? Wha? Hot chocolate seems to be one of the highest INCREASES, I guess since I have made now over 150% on my SBUX stock position, I cannot complain

[Christy Z.]

No, because we get all our coffee free with the duetto visa. :)

[Bearded Barista]

Most of my customers rolled with the punches this morning, which kind of surprised me, I figured I was going to hear a lot more complaining about it. It seemed like most of the grumbles came from my customers who just get brewed coffee.

[Sneaky]

Well the reality is that prices are changing for consumers ALL over the place. You HAVE to get used to it.

@Oversteamed, no melon, no water GRTL

Don't forget coffee is a commodity just like crude oil. It is subject to the same trading, speculation and market conditions as oil, corn, wheat, etc. etc. And the price of milk continues to change dramatically (going up). AND the price of gas affects the cost of shipping you all your goods so THAT affects the prices. Plus wheat, corn and sugar prices are skyrocking due production dropping (weather) and expansion of Ethanol taking product away that was being used for food production.

So, it is not as simple as someone in Corporate making up their minds (although no less frustrating I admit).

Maybe the future is changing prices daily like at the gas station . . . !

[The Tick]

You have to take in account that minimum wage did increase back in July and that barista starting pay had an increase to stay competitive with the rest of the market. Increased labor cost will affect the cost of goods to stay profitable.

[all done]

i am a customer and am po'd that the prices went up. 20 cents for a grande mocha. an article i read said it's b/c of milk and whipped cream prices. i always order my drink 'no whip'. so i'm really paying 20 cents more for milk? um, no thanks. with tax it comes to 3.99. good, but not that good. i think i'm finally done w/ starbucks.

[MoiMoi]

Sorry, off topic, but when should one expect the autumn drinks to arrive? Specifically the pumpkin latte?

Thanks!

[oops]

Pumpkin Spice Lattes are back Sept 1

[milk and wheat]

Sneaky, I don't know where you're getting your ideas about milk, wheat, etc., but in particular, those two products are experiencing a very, very steep price drop! Milk prices are dropping because the supply is too large, and many farmers are being paid to take dairy cows out of the production mix. Wheat is also cheap because of low demand, particularly in exports. Starbucks' disposables (i.e. paper/plastic cups) is cheap because of the quantity they use, but overall, disposables are up 30% over last year. Other than that, sugar is the only product you mentioned that's going up in price. I'm not going to touch the Ethanol issue because it's a debate I don't know enough about, but the price of corn has dropped a lot over last year and will continue to drop because of lower demand, higher supply.

[AA McAdams]

Thats 'cause the folks that just get a big coffee rarely spend enough time to enjoy the atmosphere or justify over $2 for a cup O joe. I dont remember the last time I was there long enough for a refill, maybe 12 years ago! [LOL]

[hansel]

"minimum wage did increase back in July and that barista starting pay had an increase"

did existing baristas get a raise also?

[spence]

I only worked the floor today for 4 hours. If there was a price increase neither my customers nor myself noticed.

[NEWS]

August 21, 2009
Will the Hard-Core Starbucks Customer Pay More? The Chain Plans to Find Out

By CLAIRE CAIN MILLER
SAN FRANCISCO — As the recession wears on and fewer people are splurging at Starbucks, the coffee chain’s response is to raise prices. On Thursday, Starbucks stores in several cities started charging up to 30 cents more for some specialty beverages, though the company is charging less for some basic drinks.

The price adjustments will be made at stores nationwide in coming months.

The move comes as Starbucks toes a tricky line between remaining a premium brand while retaining price-sensitive customers who can buy cheaper coffee at other shops. This summer, Starbucks has been fending off competition from McDonald’s, which has introduced a new line of lower-priced espresso drinks that have proved popular.

The price of sugary Starbucks concoctions with several ingredients, like Frappuccinos and caramel macchiatos, will increase an average 10 cents to 15 cents, but in some cases as much as 30 cents, or about 8 percent, said Valerie O’Neil, a Starbucks spokeswoman.

The price of the most popular beverages — 12-ounce lattes and brewed coffees — will decrease an average of 5 cents to 15 cents. This is the first time Starbucks has lowered prices, she said. It last increased the price of drinks by 5 cents in 2007.

“The goal of it is really to continue to find ways to balance the value we’re providing for our customers with the business responsibilities,” Ms. O’Neil said. In the three months ending June 28, sales at Starbucks stores open at least a year fell 5 percent from the same period the year before. Starbucks is also experimenting with other ways to make more money, like selling alcoholic beverages in a few stores in Seattle.

Starbucks is also trying to heighten its appeal with a redesign of some of its menus so they more prominently feature less expensive brewed coffee, and it is running a summer promotion for iced drinks.

Raising prices in the middle of a big downturn in consumer spending might not be such a crazy idea, said J. Miguel Villas-Boas, a marketing professor who studies pricing and consumer choice at the Haas School of Business of the University of California, Berkeley. Though it is paradoxical, it is a strategy premium companies often take, he said.

“Given that McDonald’s is capturing some of the consumers less interested in the premium that Starbucks offers, then the consumers left out for Starbucks are the consumers willing to pay more, so Starbucks says, ‘Let’s charge them,’ ” he said.

Connie Williams, 57, a saleswoman in Los Angeles, is one of those customers. She said the price changes would not affect her daily habit of buying a 12-ounce nonfat cappuccino “with a little shake of chocolate” at Starbucks. “I’m hooked,” she said. “It’s like asking a cocaine addict, ‘If I raise my prices, are you going to buy less?’ ”

But some customers said the price increase would make them turn away. Elise Walls, 24, a student in San Francisco, visits Starbucks nearly every day for a 20-ounce green ginger tea. On Thursday, she noticed it cost 5 cents more. “I was like, ‘Wait a minute,’ because it’s already expensive anyway,” she said. She plans to start buying boxes of tea bags and making it herself.

The sugary, creamy drinks that will now be more expensive at Starbucks are the same type of beverage that McDonald’s has been marketing in a huge advertising campaign.

Starbucks is safe raising the prices of specialty drinks because they are where the company best differentiates itself, said Kenneth Davids, editor of Coffee Review.

Mr. Davids recently published a taste test comparing espresso drinks at Starbucks and McDonald’s. The difference between standard lattes was subtle, he said, but “what surprised me was how dramatic the difference was when it got to the additives,” like syrup and whipped cream.

Starbucks customers get what they pay for, he said. “With McDonald’s, it was just terrible stuff that I don’t think anybody except maybe a 5-year-old might like.”

[Callimaco]

I still don't think a double espresso should cost more than $1.50. That leaves 50 cents for the tip jar from my two dollar bills.

[AmericanoMan]

No price increase here in Southeastern Washington State (Tri-Cities) today. Maybe SBUX is "test marketing" the "new prices" in the "big cities".

Lack of price increase could also be due to the fact that the minimum wage in Washington State is well above the Federal Minimum Wage.

[ash_sk8s]

I don't think my WM was more expensive this morning, but I wasn't paying that close of attention...

[CamSpi]

I was surprised by how well customers took it this morning. Although I did hear one customer joke, "McCafe, here I come."
But I can't believe its 70cents for an extra shot!

[Thought of the Day]

@CamSpi .70 per shot are you kidding me? Is this going to be the price everywhere? Anyone?

[CamSpi]

70 cents in my DFW suburban rich town.

[goldcoast]

70 cents for an extra shot is ridiculous.

[smile]

Our prices went up a couple weeks ago

[@usorthem3]

@Thought of the Day @Camspi @goldcoast
seeing that it takes 42 beans according to @SbuXIronchef to make an one ounce shot of espresso then they are worth $.02 each bean.
So at this price Don't Spill the Beans ROFLMAO

[Barista #6969696 Store # HADES]

To soften the blow for customers unhappy with the price increases, 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.

Change cup = T.I.P. jar

thanks 4 that & double healthcare

VIT=-3% will B Sept 3

[Marcus]

I'm not sure if I can ask OT questions here, but I was recently looking up the nutrition info for an iced signature hot chocolate grande...Starbucks claims it has only 5 g of sugar and 33 g of protein. That cannot be right!

http://www.starbucks.com/retail/nutrition_beverage_detail.asp?selProducts=%7B9D27662B-59DC-4E35-840F-FD8D00FDA05E%7D&x=8&y=15&strAction=GETDEFAULT

[liquid candybars]

Marcus signature hot choc carries a heafty 250 calories per 8 oz cup so the grand size being 16oz would mean 500 calories not sure of the grams of sugar or protein but the calorie count alone would make me steer far away.

[baristajack]

As a barista i always go to my store for a beverage , but once in awhile i will go to dunkin donuts for some type of ice coffee, which by the way tastes like water, but at the same time i do not like our ice coffee, I find it bitter, but at Dunkins they chanrge 1.00 for shot of watery espresso in a drink..

[aeiou]

Our prices have gone up twice so far this summer, but stores around us haven't had the same price changes. We've had people come in who usually go to other stores complain and I've had to do a double take making sure I've rung them in correctly. It's a little frustrating that we're the store with the higher prices...
Or is this saying that prices across the board are going to be standardized so I won't have to keep apologizing that our prices are higher than the store down the way?

[lee Jennings]

I'm done. You're all crazy. I've supported you for years and now my drink is over five bucks. Loss of a customer here folks.

[SickOfIt]

Once again is seems you guys just really don't read anything they send out. This change is a pricing TEST. This is for random stores all over the country to get customer feedback.

[Redd]

The only price increase I've seen in 2 years of working for Starbucks is with the Vivannos, and that was recently. In a neighboring county, the taxes are lower, so the drinks are 'cheaper' and people come here from there and get really mad until you explain that it's the taxes, not us!

Also, I've noticed price increases in several other restaraunts, so it's not just Starbucks!

[staci d. kramer]

I'm at my regular Starbucks in suburban St. Louis and the price for using soy went up 10 cents to 50 cents. I usually use a registered card so it's not an upcharge for me most of the time but given that some of us can't buy these drinks at all unless we use soy, maybe sbux needs to rethink that.

Also found out energy shots have been discontinued, btw.

[il32l1]

Questions, but not complaints yet from my customers. Usually just the regulars who were a little thrown off. My store is in a fairly upper class area so they just shrugged it off it seems

[il32l1]

42 beans to make a shot of espresso? No way, that gotta be enough for a French press. Maybe his/her scale is not calibrated?

[raennilr]

ALL DAY LONG! Wish corporate would give us a bit of a heads up on this... we look like a bunch of idiots behind the counter.

[Bearded Barista]

Raennilr, it's probably been on our portal for at least the last 2 weeks, I know it was at my store. So corporate did their part. Someone in your store should have been printing up the info so it could be disseminated among the partners for the last week or so... I'm sorry it felt sprung on you though, that had to suck.

[CD]

70 cents for the extra shot OR the extra matcha (in a Vivanno). That's outrageous.

[The Tick]

Yeah, it was on the portal for a few weeks and new menu board cards were delivered last week. Someone was asleep at the wheel passing along information at your store.

[KC]

Starbucks base pay hasn't increased in three years. The minimum wage increase did not affect baristas at all, so while two years ago, Starbucks employees were payed on average around $2 more than minimum wage, we are now payed about .15-.50 cents more than minimum wage.
Pathetic.

[Tired of being poor]

Actually, I don't think that this price increase will affect barista pay rate at all. The last time our pay was raised was about three years ago, and on average, a barista made about 2 dollars more than minimum wage.

With the recent increase in minimum wage, base pay is only about 15-50 cents more. Pathetic.

If baristas are so important to Howard because we are the 'face' of Starbucks, I think that they should offer competitively based pay rates. Starbucks may be suffering during this economy, but so are the hourly workers.

You shouldn't just increase prices to increase stock prices while you leave your hardest workers out to dry.

[Alex]

They already raised prices here in Tucson, about a month ago. Now it's $2.00/$2.30/$2.60 for iced coffee. I'm over it. $3.30 for a venti iced coffee sub. vanilla with half/half is ridiculous.

[Mark]

There is a Starbucks at work and another across the street. In my office complex there are 3 other places that sell very good coffee, including Seattle's Best and Famima. They are $.20 to $.40 cheaper than Starbucks.

It has been about 1 1/2 years since I bought anything from the Starbucks. Now I have an additional $0.20 a day incentive to keep it that way.

[green_cup]

You shouldn't just increase prices to increase stock prices while you leave your hardest workers out to dry.

Posted by: Tired of being poor | August 21, 2009 at 03:36 PM

Not to sound harsh, but this is an employers' market.

You're in a Catch-22. You clearly cannot leave Starbucks due to lack of another job or lack of actual skills outside of Starbucks, but you really need to to find a more lucrative gig.

Honestly, you probably need to bite the bullet and go to school and get an education. Starbucks will never pay the bills for you in any meaningful manner.

You will always feel poor if you continue to work at Starbucks.

Starbucks is essentially the McDonalds of coffee. You'd never think to make a career out of McDonalds would you?

[News]

Friday, August 21, 2009, 2:19pm CDT
Starbucks changing its prices
Austin Business Journal

Starbucks Corp. is adjusting prices in several markets starting next week, making some large and elaborate drinks more expensive and smaller, plain-coffee offerings a bit less.

The price changes were identified in a Wall Street Journal report Friday. While the initial roll-out will be limited to a few markets, the coffee giant confirmed to the newspaper that the changes will go nationwide in the coming months.

They include charging anywhere from 5 cents to 30 cents more for certain "venti" (large) drinks as well as some flavored macchiatos and frozen Frappuccino concoctions. An extra shot of espresso will also cost a few cents more.

But some smaller and simpler drinks will cost 5 cents to 15 cents less.

The pricing may not be consistent from store to store, depending on whether an outlet is company operated or a licensed store. There also may be variations between markets.

Store employees have been advised in memos to "expect customers to be sensitive to pricing changes in this economic climate," the WSJ reported.

A spokeswoman for the Seattle-based coffee chain (Nasdaq: SBUX) told news outlets this is the first time Starbucks has lowered prices for its products. Starbucks' last chain-wide price hike was in 2007.

Starbucks is dealing with a 5 percent slump in same-store sales reported in its most recent quarter. It also has been trimming stores and cutting costs.

Starbucks has 69 locations in the Austin area and roughly 800 stores across Texas.

All contents of this site © American City Business Journals Inc. All rights reserved.

[Partner]

@ Mark, you do realize that Seattle's Best is owned by Starbucks (since 2003), right? Keep buying! :)

[Tired of being poor]

Green_cup,

Who on earth do you think you are? I attend a university and plan on graduating with two B.A. degrees in four years next Spring.

Starbucks has been wonderful as an employer, especially for a student since I need to change my hours every term.

I just don't understand where your condescending attitude is coming from. I am going to begin my career next year, but even if I didn't, Starbucks is a meaningful career choice for many partners.

And this may be an employer's market, but Starbucks has a responsibility to its employees, who represent the company and provide the legendary service and third place environment that is at its core.

Your attitude is disgusting, but I take pride in the fact that if you came to my store, I would still treat you like any other customer with respect and kindness. It's too bad that you didn't have those values introduced to you during your life.

[HarleyBarista]

You want the truth.. I am glad to see that Starbucks is trying to do something other then a constant barrage of discounts.. Gold Card, Registered SBUX card, treat receipt... If SBUXs keeps discounting drinks, you can’t expect them to keep the cafe open. I am sure that some cafes are discounting up to $500 per day thats an amazing $182,000 per year. And the operating cost stays the same.. Besides have you gone into a grocery store lately!!!
Good for you STARBUCKS!!! Glad to see good things hapening.

BTW we have not had 1 customer complaint since launch of the new pricing grid.

[Catherine]

I often get a tall carmel macchiato, and I notied today the price went up. It used to be $3.33 and now today it was $3.45. Bah humbug.

[SSignatz]

I have a question for those that talk about their wages not being competitive, or comparable- To what and with what? What comparable jobs out there are you compensated less than? In your minds- what are other folks in similar jobs paid, that you are not? Why be there, if you disagree with the pay scale? Why not go on to bigger and better?
What other profession should you be on par with that you are not? If you think you are stuck in a dead end job, with no prospects, and everything sucks- You have 3 choices- Leave now and try to find something better (Maybe with an independent, if this is your true calling?) Stay and whine, or stay,do your best to try to fix it (By petitioning, organizing, or (gasp) being better at your job- and try to move up to a more compensated position.
If you believe you are stuck, and a slave, and a victim- you are. If you believe you have options, and that amazing, motivated, hard working, achieving people are always in demand, then you are also correct. If you are hoping that everything will just go back to 10 years ago, and then everything will be ok, I have news- it isn't going to. Sorry. But you can do much more for yourself than you are apparently giving yourself credit for- Should you so choose.
Just so you know- I now run a regional chain of coffee houses, grossing 8 mil. a year, with a roaster and bakery, and we kick S-Bux ass locally. (I don't even bother talking about competing with McD's, etc. They are not even in my market segment)
Oh- BTW- My barista staff and managers make slightly less than your local guys do- But are much happier, it seems. Not perfect- but my goal is and always has been to help them succeed- and we do that by helping them get better- and eventually spread their wings and move on. It isnt just about the wage. I also state flat out that if you dont WANT, and I mean want, to work for me- Then don't. I will help you find something else. Wanting to be here is a requirement.
Perhaps some of you should look into some options. Whining is fun - But isn't really helping YOU, in the long run.
Best of luck to you. I would wish luck to the Bux- But hey- Its been SO much fun watching the drama, why mess it up now?

[fmrSM]

I think Dunkin Donuts' lattes are great. They do a great job steaming the milk. The espresso isn't bad. I won't dispute that SB espresso is the best tasting, but for the price, free added flavor, you can't beat DD.