One of the biggest coffee shop chains, Starbucks, found its way to battle the recession — it raises prices, higher and higher. The brand is charging its loyal consumers with more and more money for the same range of products. The new strategy, announced yet in April, and now it is being implemented.
Despite the cost-lowering and more generous moves by its major rivals, like McDonald’s, Starbucks sees its victory in taking more for more complicated and less for simpler varieties. In New York, for example, an extra espresso shot now costs $0.70 (it was $0.55 before), additional syrup is 40 cents (more than 30 percent increase) and for a grande triple soy vanilla latte now they charge $6.25 instead of $5.55.
In fact, Starbucks do benefit from the new pricing strategy. Back in summer University of California, Berkeley Haas School of Business professor J. Miguel Villas-Boas commented on the situation: “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.‘»
The adopted approach of getting more cash from the customers works rather for short terms, but doesn’t seem to be ruling for long years. The competitors of the brand do not wait to make everything to squeeze Starbucks out of the market. Now McDonald’s is pushing up with its recently introduced free Wi-Fi service, while he green-and-white coffee brand is still charging for it.