The price of a small (illogically called the ‘Tall’) Starbucks Cappuccino is now £2.05. The Venti now costs £2.65
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 shortgage 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 dissappointing. I prefer the taste and quality of Costa Coffee and Cafe Nero. I don’t really object to paying £2 for a cappuccino, but, I wish Starbucks would get better coffee.
- By the Way your welcome to buy me a coffee
- The Economics of the price of Coffee
- Starbucks - about
- Starbucks Coffee at Telegraph
4 comments ↓
Get better coffee? Have you ever had Cafe Verona or Gold Coast? Get a life….and a better palate.
[...] Is the price of Starbucks a rip off? [...]
Is the price of Starbucks coffee a rip off you ask… I have seen on this website you have written some article on supply and demand and therefore the answer should be quite obvious.
Starbucks coffee as sold from their many outlets which need to cover the cost of each shop, packaging, staff, etc etc.
Remember when buying their coffee you are also buying a brand and also their experince - that costs money so no it is not a rip off they have simply put a value on their product to distinguish themselves in the market.
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