Is the Price of a Starbucks a Rip off?

The price of a small (illogically called the ‘Tall’) Starbucks Cappuccino is now £2.05. The Venti now costs £2.65 (2008 prices)

This year the price of Starbucks drinks have increased by more than the rate of inflation.

Costa Coffe and Cafe Nero have both kept their prices below £2, but, industry analysts argue that it is highly likely they will be tempted to increase the price of their drinks.

Unlike alcoholic drinks, coffee is not subject to excise duty. Therefore, how can coffee companies such as Starbucks justify such as high price?

The Price of a Cup of Coffee

  • Milk 6%
  • Coffee 2%
  • Labour 18%
  • Rent 13%
  • Admin 26%
  • Cup / sugar / lid e.t.c 4%
  • V.A.T. 15%
  • Profit 14%

It is interesting that the smallest part of the price is the actual coffee beans. Even if the price of coffee doubled, it would only have a negligible impact on the final price of coffee.

In recent months the wholesale price of milk has increased significantly. This is due to both growing demand (including demand from China) and a shortage of supply from the British milk industry. Therefore, this has contributed to higher costs.

Rent is a big factor, especially in city centres. Also one feature of coffee drinking is that there is quite a low volume. People may buy 1 coffee and sit for other an hour.

In my personal experience, I find Starbucks coffee a little disappointing. (though on a recent trip to US, I had a really great dry cappuccino – so quality does vary) Generally, in UK I prefer the taste and quality of Costa Coffee and Cafe Nero. I don’t object to paying £2 or even £3 for a cappuccino, but, I would like higher quality standards.

Buying Office Space

In this era of laptops, one of the main attractions of a coffee shop, is that it makes a break from working at home. Often I take a laptop, and write for an hour. As much as buying a coffee, I’m renting office space. I’m particularly fond of a nice Blackwells cafe (Cafe Nero) in the centre of Oxford. It’s a great cafe because it’s in a bookshop; there isn’t irritating music and there is a literary vibe which helps with writing.

To be honest, if the price of a cappuccino increased from £2.30 to £3.30, I’d probably still go there.In that context the price of a starbucks isn’t a rip off, if you’re getting a nice environment.

26 Responses to Is the Price of a Starbucks a Rip off?

  1. Edteach January 14, 2011 at 7:51 pm #

    I agree, the coffee at SB is horrible. Dark and bitter and 40% more than local coffee shops. I prefer Paneras bottomless cup of coffee and free internet and 99 cent bagels. The coffee at Paneras is 1.89 for a bottomless cup and they don’t care if you sit there and use the Wi-Fi for an hour. Starbucks and the mind numb brand loyal idiots can keep the 3$ one time fill coffee that makes your mouth pucker when you drink it. I think they make an intentional bad cup of coffee to get people to buy the higher end products, [higher profit products]
    Many of the smaller places like Scooters and one of a kind local coffee houses that have great atmosphere and offer music and other amenities for free. You can keep the corporate whore and its bitter toilet water.

  2. Shaz July 14, 2011 at 12:07 pm #

    Heather, you are telling someone to ‘get a life’ because they prefer a different brand of coffee to you. You are a retard.

  3. richard August 24, 2011 at 7:39 pm #

    such snobbery,just posing outside coffee houses,kippers and curtains,these are the idiots that wonder why they are in debt on their credit cards.your not even thirsty,if you are drink tapwater.

  4. Taryn September 19, 2011 at 6:29 pm #

    Both you and Richard have used ‘your’ in the wrong context – it should be you’re, your means something belongs to someone. Perhaps you should skip the cup of coffee and buy yourself a dictionary…

    • kris October 7, 2011 at 3:16 am #

      LOL @ TARYN. I always find it hugely amusing when people correct punctuation and spelling of peoples posts online and completely just ignore the forum topic. Taryn, did you ever stop to think that maybe most people have better things to do than to worry if they’re (or is it their) using the right type of ”your” and the most people dont give a s%&@ if they have used the correct the wording, as long as the message is understood/delivered.

      Anyways, being a business owner myself, i think the price of coffee in the uk is more than fair, if you want a cheap coffee, stay at home and make it yourself. When your in a cafe, your paying for the environment that your in, not just the coffee. Enjoy life :)

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