They're going up an average of 9 cents -- the second price increase in about ten months. Wall Street loved the news (it was officially announced after the market closed, but word was out before that), as Starbucks shares rose 47 cents, or 1.7%, on Monday. (Seattle Post-Intelligencer)
> One angry customer says: "If they raise it, I'm not going to go there, even if it's only 9 cents." It's not the money so much as the idea of two price increases in a row, she says. With Starbucks' buying power, "you'd think they'd be able to keep costs down." (Seattle Times)
July 23, 2007
so what? everything else is going up in price too. Is it news worthy everytime gasoline goes up, how about fruit and veggies at the market? Unbelievable $3.29 pound for peaches, I either pay or select a different fruit. I'm still at the same grocery store. People bitch for a few days then get over it. It's just that we, as partners, have to deal directly with the customer at our counter,we are the front line. we sympathize, feel their pain, smile and say how great it was to see you again, hope to see you tomorrow. It's what we do as the service provider to our guest. It's all we can do is continue to provide an uplifting experience each and everytime that valued person opens our doors and walks into our store....by choice. And it is we, the front line partners, that encourage our guest to chose to open our doors each and everyday. all because we provide that feeling of being conected to our guest, and they are our GUEST! Show some compassion, show some respect but above all show some 5 ways of being.....
WELCOMING
CONSIDERATE
KNOWLEDGABLE
GENUINE
INVOLVED
Might be a good idea to take out the "GREEN APRON BOOK" dust it off and give it a quick read it does a soul good!
make a friend, make a difference, make someone's day
Posted by: | July 23, 2007 at 04:46 PM
HA HA HA BARISTA BRYAN!! IN YOUR FACE! There, I saved all of you from having to gloat.
Posted by: Barista Bryan | July 23, 2007 at 05:07 PM
Wow. Well said, anonymous. Here's to our loyal customers, they've been putting up with a lot these days. I know I love my regulars. Just gotta keep treating them right.
Posted by: atownsbuxrules | July 23, 2007 at 05:25 PM
At my store we had people get mad over the our taxes going up so first we got hit with the first price increase, and then taxes going from 8% to 9.5%, which makes us the most costly store to buy a drink from in the area, the rest of the stores taxes range from 7-9%
Posted by: charleston | July 23, 2007 at 06:23 PM
As a very loyal customer, a price increase is no problem for me. You are worth it! Thanks!
Posted by: JEP | July 23, 2007 at 06:40 PM
I hate to say I told you so on the price increase and outsourcing of HR... Let's see if the Pepsi buy out comes true...
Get your pullin' arms ready baristas... it's time for soda jerkin'
Posted by: Pat Nerr | July 23, 2007 at 07:23 PM
Oh what positive posts! Anonymous, you rock! When I read your post it made me smile and just reinforces the passion I have to wrap myself around the 5 ways of being for myself, my team, and my customers. Thank you for being such a bright light in what could have been a dark room. There's an old Bob Dylan song called "Forever Young" that made me think of what you were saying, May you stay "Forever Passionate" You are a true asset to our company!
Posted by: Darleen | July 23, 2007 at 07:33 PM
Yeah, in my area, our tax is 10.225%, so this is not going to be popular...
Posted by: | July 23, 2007 at 08:49 PM
every store is going to have their share of bitchy customers regarding the price increase - there is not stopping it.
oh well, sit back - relax ... and CONNECT over how EVERYTHING is going up - first insurance, then gas - now your morning buzzzzzz!
it takes GAS (of some form) to ship those beans from sumatra, ethiopia, colombia and all those other bean boasting nations. USE that as your pawn. trust me, eveyone with an automobile will understand.
also, i think ... agreat opportunity to push the more basic beverages such as our black hot and iced coffee, iced teas and americanos. the flavors are so robust, and pure ... and that WHITE MOCHA is much more expensive.
this takes place the same day as the blueberry launch nationwide.
it is going to be berrylicious.
Posted by: Decaf for EVERYONE! | July 23, 2007 at 09:01 PM
bring your own dam cup..the price should even it out...haha..and blueberry frappuccino..
on another note..i swear if we start selling cereal..im out.
Posted by: medic.al.bariSta. | July 23, 2007 at 09:18 PM
To angry customer:
Do you realize your likely still paying well over $4 a day for a luxary caffinated beverage?
Yeah, I can see how 9 cents should be a BIG deal.
Posted by: indie2 | July 23, 2007 at 09:50 PM
The problem I've found with every price increase thus far (since 1999 when I started) is that each time, our collective tips become smaller so that the customers really aren't paying more... the baristas are actually just getting less. Other than that... I've had hideous customers over many other things, price had nothing to do with it, their personality had everything to do with it.
Posted by: lquisp | July 23, 2007 at 09:55 PM
I understand why they have to raise prices, but I still dread having to deal w/ the customers that freak out about 9 cents.......and the fact that I had all the prices memorized for the drive thru...that was nice :)
Posted by: seattlesuburb | July 23, 2007 at 10:13 PM
I understand why they have to raise prices, but I still dread having to deal w/ the customers that freak out about 9 cents.......and the fact that I had all the prices memorized for the drive thru...that was nice :)
Posted by: seattlesuburb | July 23, 2007 at 10:14 PM
Indie2,
Please learn to spell, you are embarassing to us baristas
Posted by: | July 23, 2007 at 10:23 PM
This is going to be a toughone for sure. I have come to this web-site before to see how news like this is taken and these have been the most positive postings I have seen...on any topic.
I am not excited about telling my customers or my partners about this for sure. This will take every partner Being Legendary to the point of being over the top.
To those that have posted I commend your positive attitude. To those that will post after these messages figure out how to CONTINUE to deliver the legendary expeirence and deliver.
To Howard, Jim D., Jim A., Marty Coles, Launi, Cos LaPorta, and Paul Towhig: in the future inform your front line partners at the same time you tell the press. As of 5pm West Coast time there was nothing on the portal about the price increase and rumors where flying. Treat us as the leaders that you want us to become and that we are. Secondly, what is going to be done FOR the customer? Ideas: The return of the free drink with commuter mug purchase; surprise and delight in Fall and winter promotions; the return of Mocha Mondays; add a complimentary drink to register starbuck card holders; or add shot fridays.
Finally: Starbucks is a great company and I love what I do. When I come to the point where I no longer enjoy what I do or I think the aforementioned partners listen to Wall St more than the partners and customers then it is time to go. We are not there...yet.
Posted by: PDXBarista | July 23, 2007 at 10:23 PM
An average of 9 cents? That had better be either 5 or 10 in my area because if I have to start doling out pennies I'm going to be very unhappy.
One regular mentioned hearing about it today but he didn't seem upset by it. I do recall a massive outbreak of complaints during last October's price increase. I simply told them it was supporting our $1-$2 raises in base hourly pay and most customers felt that they would pay it happily if it meant we were taking home more at the end of the week.
This one unfortunately cannot be coupled with that reasoning...so we'll hear plenty of whining. Funny that when other food establishments raise their prices it seems to fade away with not a single issue. I guess Starbucks is supposed to take a hit to appease their "loyal customers" who frequent the stores so often that they notice a few cents difference. Pssh give me back my 99 cent gallon of gas and my $1.50 gallon of milk first...those are things I *have* to pay for.
Posted by: Taylor | July 23, 2007 at 10:30 PM
People who can afford to pay alot for coffee can afford the increase. There will always be a certain segment of society that thinks the more expensive the product, the more elite or upscale it is and will still buy into that. On a personal note, I stopped drinking Starbucks coffee, even home brewed due to constantly getting sick. Maybe I am allergic to something in it or drinking too much in one sitting (12-16 ounces). I still go for the iced teas. Has anyone else had a problem.
Posted by: Christine | July 23, 2007 at 10:35 PM
Yes, it was in the portal. I don't remember where exactly, but it was there. I just happened to stumble upon it accidentally. I've known about this for about the past week. It even had a Q & A. I hope this translates into a raise even though the Q & A didn't really say much regarding it.
Posted by: Brooklyn Barista | July 23, 2007 at 11:25 PM
if some dude comes to me complaining about the price increase. i'd simply give him a few locations of cheap-o non-starbucks coffee shops in town. enjoy.
~lor ♥
Posted by: Lorenzo | July 24, 2007 at 03:10 AM
Ten cents isn't a big deal. Don't get me wrong. People waste more money for dumber things. It's a perception thing. Perception is everything. For example... Participation rate for the partner markout program is pretty low. They have considered just doing away with it... The overall dollar amount isn't much to the company, but if they took it away, how would you feel?
As far as Starbucks use of the money it gets... Hundreds of thousands have been spent on an Ethnography study of Starbucks customers and partners... It's been going on for a couple of years now. First... any partners heard of it? Second... have you reaped any benefits from it? BTW... 100K+ just recently spent bringing in 60 people from that study for 3 days of fun and activity... that should increase the sales in the stores.
NOW, how does a .10 increase sound?
Posted by: Pat Nerr | July 24, 2007 at 06:58 AM
For Starbucks to claim that this price increase is about cost of goods is absolutely ludicrous. Look at the last few quarterly earnings reports for the real reason. Profit keeps growing but the statistic that keeps the stock price up is same store sales which have been flat. Starbucks even issued a warning last month saying that they might not even hit the low end of their projections. When we're not attracting new customers and those customers that are coming back aren't buying anymore, the only way to raise same store sales is price increase. Look what happened to the stock yesterday...it was up 50 cents and above 28 for the first time in a while.
Posted by: sbuxmanager | July 24, 2007 at 07:27 AM
well some of the pertners i work with are lazy and give the less than bare minimum,to customers, and their co-workers so im sure the price increase wont affect their social hour,
Posted by: jack | July 24, 2007 at 08:17 AM
i think for me there are a few issues..first this is the SECOND increase in one year, the last one being october 06...second for me and my store, we lose money basically from the "just say yes" policy...all of the "can i get xtra xtra xtra xtra carmel sauce cause my ass isnt big enough yet...people.....that sauce is expensive and we dont charge for extra anything, as long as it comes in the drink ..plus "can i get more whip cream"..after they gulped down the standard amount we already put on it..not to mention "doppio in a venti iced cup so i can steal all your half and half"...all im saying is that there is a different way to make up for loss ( maybe less crappy mugs..less promo crap we only end up tossing) than punishing all the customers across the board
Posted by: scottshift | July 24, 2007 at 08:23 AM
SBUXMANAGER...
No doubt... no doubt
Posted by: Pat Nerr | July 24, 2007 at 08:25 AM
As a customer, I can't say I'm really happy about the increase. Ten cents doesn't seem like much but it does add up, especially where I live, where tax is ten percent. But, having said that, it won't keep me from going to Starbucks when I'm of the mind. Everything is going up horrendously, just a trip to the grocery store causes sticker shock lately, so that ten cents doesn't seem all that bad in comparison. People will complain for a while, but they'll either stop buying, buy less or just keep coming and get used to it. Business will go on.
Posted by: Kat | July 24, 2007 at 08:46 AM
Please don't blame the cost of gas for the price of your coffee. Gas could be thirty-five cents a gallon and Fivebucks would still be charging an arm and a leg for their product. Do you know how many times I've come to this site and read Starbucks employees complaining about their customers? I even saw one where a guy wanted to throw hot coffee in the customer's face. If that's the service people are paying for when they come to Fivebucks, I think it would be well more worth it to buy Foldgers and do something worth while with the rest. This experience you are talking about is fake more times than not. Just because somebody smiles and tells you to have a great day doesn't mean they mean it. I know; I'm in sales.
Posted by: | July 24, 2007 at 09:07 AM
"I even saw one where a guy wanted to throw hot coffee in the customer's face."
They wanted to, but probably didn't. Have you also read the many horrendous accounts of partners getting scalding hot lattes thrown at them? Have you been out in society lately and see how shitty some people act in public? If you're genuine with your barista he/she will probably be genuine right back at you.
Posted by: | July 24, 2007 at 09:48 AM
"Please don't blame the cost of gas for the price of your coffee"
And just how are we supposed to ship the coffee? Gas prices do figure in....
"Do you know how many times I've come to this site and read Starbucks employees complaining about their customers? "
Why do you keep coming back?
"Just because somebody smiles and tells you to have a great day doesn't mean they mean it. I know; I'm in sales"
Just because YOU are FAKE does not mean that baristas are, seems you are the one with the shitty attitude.And its Starbucks, not fivebucks, don't want to pay the 9 cents more, no one will force you to, you do have a choice. Go buy folgers, if you want to drink garbage.
Posted by: | July 24, 2007 at 10:22 AM
I have not been a Starbucks customer for several years, and it's not because I can't go down the street without tripping over three of them. It's because I can go to 7-11 and get better coffee (with free refills!) for less than a dollar, and more often than not, the cashier actually makes me feel like my business is welcome. It makes me sick that so many sheep- er.. people "flock" to Starbucks daily, some several times a day, only to be charged outrageously inflated prices for mediocre coffee. And now they are hitting their customers with another price increase? I know the appeal of waiting in line, being served by a surly barista with 10 piercings, paying an exorbitant $3-$4 FOR COFFEE, waiting another 10 minutes for your asinine concoction of crap, and then fighting for a chair so you can enjoy the "coffee culture" is hard to resist, but seriously- they charge that much because their customers let them. What kind of idiot would spend that kind of money on coffee? And every day? I will never patronize another Starbucks again, and you can bet me and my 99 cent 7-11 French Roast are laughing at all the geniuses who can't wait to toss their money into the big mouth of Starbucks.
Posted by: Sara | July 24, 2007 at 10:23 AM
Sara,
Try pulling up a chair and relaxing in 7-11. See how long they appreciate your business then. They'll probably call the cops and have you committed. Of course, my biggest beef about The Bux is you can't get Mountain Dew there.
Posted by: Barista Bryan | July 24, 2007 at 11:24 AM
The extra caramel comment cracked me up. We had a lady come in one time who wanted soooo much extra caramel in her drink that she told us to charge her for it! She said she wouldn't have felt right otherwise. It was about an inch of caramel sauce. How would you drink that?!
But on the genuine issue. I am genuine. I hope my customers and partners see me as that. Yes, I will fake smile if I am having a bad day, but that doesn't mean I do not care about you. In fact, it means I care enough not to burden you with the junk that goes on in my life. I just want you to have your third place. So have another for-here cappuccino on me!
Posted by: drinkerofshortlattes | July 24, 2007 at 11:59 AM
On that subject - does anyone here work in a store that has a substantial amount of for-here orders? Of course it can get annoying during a morning rush, but during the slower hours, I take pleasure in giving people a nice-looking drink in a mug. Feels more personal, I guess. But few people even order it that way in our store, unfortunately.
Posted by: Elizabeth | July 24, 2007 at 12:15 PM
Thanks to the customer who put that they would still keep coming to see us! Its really great! Regardless of your feelings about the price increase theres nothing we can do about it but keep a smile on our face and continue to provide legendary service to our customers.
Posted by: Zac | July 24, 2007 at 12:18 PM
If someone orders a pastry for here, we always ask if they want their drink for here as well. And if they have a book or stacks of papers, I always will ask. Often they do not even know that it is an option. I have gotten a couple of customers "trained" to now make it a point to come in 15 minutes earlier and use that time to truly savor their hand crafted beverage in-store instead of sipping a by-then substandard drink all morning. It makes my day!
Posted by: drinkerofshortlattes | July 24, 2007 at 12:24 PM
As a happy customer, I have no problem with the price increase and believe the partners, product and the company are awesome! I've unfortunately not had a lot of time to drop in and sit at some of my favorite Starbucks locations, but I always receive fantastic service at the drive-thru. Thank you to all my favorite southeast Michigan Starbucks locations, you won't hear me grumbling about the price increase and I'll still leave a nice tip, hehe. Ciao, dollinks!
Posted by: Latte Rebel | July 24, 2007 at 12:27 PM
I heard Cos Laporta is taking over the SVP position for the Western Division. What is happening to Mark Lindstrom? Is he finally seeing that the coffee business is no where as lucrative as the oil business?
Posted by: Vicki Verona | July 24, 2007 at 12:39 PM
"bring your own dam cup..the price should even it out...haha..and blueberry frappuccino..
on another note..i swear if we start selling cereal..im out."
Funny you mention that....look at the "TEST" menu on your POS the next time you work.....
Posted by: Vicki Verona | July 24, 2007 at 12:49 PM
Comparing Starbucks to 7-11 is like comparing McDonalds to TGI Fridays. Of course there is a price difference.
People always complain about our prices, but take a look at some high-end coffee shops in your area. Kellys in LA charges an average of 10 cents more for the same drinks we have. I was in Lake Arrowhead this weekend and a sandwich/coffee shop in the village charges $3.30+ for a single latte. They had nothing on their menu UNDER $3.
Face it, our run-of-the-mill serious coffee drinker drinks range from $1.40 to $3.00. It's the fluffy sugary dessert drinks that cost you more. Go to Baskin Robbins and you'll pay $3-$5 for their desserts as well.
I just find it hypocritical how the conversation about our prices creates such an uproar. Objectively speaking they are no higher or lower than other cafes of the same concept and design. It's just an opportunity for the "I hate trends" crowd to express their rebelliousness.
Posted by: Taylor | July 24, 2007 at 01:15 PM
"It's not the money so much as the idea of two price increases in a row"
As opposed to what? A price increase, a decrease then another increase? Please get over yourself, Angry Customer. Go to McDonalds, which Consumer Reports rated highly for its coffee, and experience sullen service and aesthetically deadening decor. Drink yourself silly. Now. Go. Please. Be non-angry far, far away from Starbucks, and everyone, including those baristas you surely don't tip, will be much happier.
Posted by: Boozer | July 24, 2007 at 01:54 PM
"if some dude comes to me complaining about the price increase. i'd simply give him a few locations of cheap-o non-starbucks coffee shops in town."
Exactly. The deli two doors down has some generic, foul 2-hour-old coffee sitting in a suspicious looking glass carafe, and it's only a dollar! Please drink that coffee, Mr. 9-Cent Cheapskate, and pride yourself on knowing the price of everything and the value of nothing.
Posted by: Boozer | July 24, 2007 at 01:57 PM
Wow. Boozer. Try to remember that you also work for a fast-food franchise, although one that has the aroma of a slightly upper scale place.
Please get over yourself.
Your job is to make coffee, and get to the next customer in line, all within 30 seconds.
I do not see the McD "partner" begging for tips for frying up your burger. God knows it takes more effort to do that than to press a button on a machine that automatically pour the espresso shots.
No wonder you have problems with tipping, with an attitude like that.
Posted by: jt | July 24, 2007 at 07:50 PM
The people that say 7-11 coffee is better than Starbucks coffee are not a true coffee drinker.
7-11 coffee is like drinking boxed wine(gross). The price increase is due to everthing going up freight changes, rent, wage, milk(7% increase in one month), gas & electric, etc. Everyone needs just look at their own expenses and you can see "prices are going up" utility bill, food bill, insurance, gas pump, even stamps.. Come on people its not just Starbucks it EVERYTHING!!!!
Posted by: | July 24, 2007 at 08:02 PM
I have not heard anything about this increase, It is crazy that even us store managers are out of the loop with something as important as this. I have a new store that is already struggling to get customers to pay the $2 when there is a Tim Hortons right around the corner. Plus for everyone complaining about there state taxes. ours here is 14%
Posted by: Canadian SM | July 24, 2007 at 09:41 PM
Um... since when are any baristas allowed "ten piercings"? Maybe you weren't at a Starbucks at all, folgers drinker. Maybe, I dare say, you're full of crap.
Why read Starbucks Gossip if you haven't been a customer at all in several years?
It's like stalking your ex on myspace. Something must be missing. The chemical after-taste just isn't the same, is it? ;)
7-11, now that's classy. It's like dumping Catherine Zeta Jones for Britney Spears. Yum.
Posted by: atownsbuxrules | July 24, 2007 at 10:07 PM
VickyV- Mark Lindstrom is promoting-there was a press release about executive realignment last week. It's on the first page of the portal. Jim Alling is promoting, too. Yayyyyy! The stock price started rising right after the announcement.
Posted by: bucksguy | July 24, 2007 at 10:16 PM
I wonder why the press releases of leadership re-alignment come before the company announcement? I wonder if this has to do with the Partner view scores being poor in the "communications" category?
Do you have a best friend at work?
Posted by: Pat Nerr | July 24, 2007 at 10:41 PM
Everyone knows that Canadas sale tax is much higher becauce you have much lower or no local, state, Medicare, disability, federal taxes. If Canadians pay 23.7% per paycheck on just taxes than 7.5% for sales tax than pay 3.7% on their familys health insurance and than $7000 per year for property tax than maybe you can complain about 14% sales tax. And yes these are the taxes you would pay if you live and own a home in California!!!!
Posted by: | July 24, 2007 at 10:49 PM
Dang! I was just starting to have all the prices memorized after last October's increase... :(
So I guess this means that a venti RMF will be $5.01 (with my area's 5.6% sales tax). So at long last, we really do have the "$5 cup of coffee omg" that people keep joking about.
Posted by: Mutable Barista | July 24, 2007 at 10:49 PM
SBUXmanager and Pat Nerr...
I'm not sure where you get your financial information from but Starbucks has had 61 straight quarters (or 15 years) of positive same store sales growth. Flat would mean zero same store sales growth. Here is the chart:
http://media.corporate-ir.net/media_files/irol/99/99518/fin_highlights/Q207/Comparable_Store_Sales_At_a_Glance_061907.pdf
What DOES have investors concerned, and rightly so, is the leveling out of transaction growth. This is something that Jim Donald has had to address in at least one of the last few quarterly financial conference calls.
As a general rule, what price increases do is increase guest check averages which help ward off the effects of stagnant transaction growth while helping preserve the record of positive sales growth. This is not necessarily an immediate fix because there is almost always a small drop in transactions which accompany price increases. The idea is to weather the drop and, when customers finally get used to the higher price and come back, Starbucks' top line benefits.
In addition, price increases DO help relieve pressure on margins which will help Starbucks meet their profit guidance.
And, Pat, you're barking up the wrong tree with your insinuation that the expense of proceeding with the Ethnography study (whatever that is)is wasteful. The willingness of Starbucks to jettison the Costa Rica trip at the beginning of the calendar year demonstrates a rigid adherence to fiscal probity that other companies would do well to emulate.
Posted by: Joe O. | July 24, 2007 at 11:22 PM