Recession Schmession. Starbucks to Raise Specialty Drink Prices

By Kiran Aditham 

Despite the economic crisis that’s resulted in a drop in consumer overspending, the New York Times reports Starbucks is moving forward with a plan to raise prices of specialty drinks nationwide by up to 10, 15 or even 30 cents. Why? Well, it seems the brand is somewhat threatened by Mickey D’s and its new line off coffees and is hoping that its hardcore audience will happily slurp up Frappucinos and Caramel Macchiatos no matter what the cost.

J. Miguel Villas-Boas, a marketing professor at UC-Berkeley, tells the NYT, “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.'”


But despite balancing the scales by lowering the cost of other bevvies like brewed coffee and lattes anywhere from 5 to 15 cents, is Starbucks being too presumptuous in thinking that loyalty will always conquer over price? It’s a bitter pill to swallow, just like most of Starbucks’ brew. If you don’t mind, I’ll just head to the deli for the kind of Joe that tastes like Valvoline, costs a buck but still does the trick.

More: “Does Starbucks Menu Makeover Entice You?