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
13 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.
[...] Comment from: Is the Price of Starbucks a rip off? [...]
lets see how many of these coffee outlets are left at the end of 2009. Of course these joints are a rip off and as for their “experience”, half of em didnt exist 10 years ago. they set up primarily because a cup of coffee is peanuts to make, you employ cheap minimum wage young people, give the places a snazzy name and feel and just watch the suckers queue up for their overprice cup of coffee. all these joints are a luxury no one needs, just want. I predict fewer of them by the end of 2009 when people truly do wake up and smell the economic coffee.
Vernom,
Yes, I agree, Starbucks is overpriced in terms of the cost of the actual product they sell — medium-quality coffee and materials produced cheaply in third-world countries. However, you have to remember that the customer is not always a “sucker”. They know Starbucks is expensive, but they pay for the ambience, for the experience. Not only that, but an emotion. Whether the pleasure be “real” (they genuinely enjoy the taste and experience of drinking a Starbucks coffee) or “fake” (they are driven to a store because of peer pressure, advertisement or for prestige), they, to some extent, are buying their happiness. Can you honestly say that genuine happiness can only be bought at less than £2 a cup?
Adding my pennyworth to the floor…I agree that Costa coffee tastes better…but you dont have all the options that Starbucks offers. For those of us who want the latte without the calories … I am perfectly content with a tall, skinny latte with sugar free hazelnut syrup extra hot….and I just can’t seem to get that anywhere else. However when it comes to a basic coffee Costa wins hands down every time.
I’ve also just bought one of the Starbucks cards. I get a free first drink and I get all my syrup shots or extra coffee shots free. Keeps the cost down that teeny tiny bit. Just dont get suckered into buying more just because you have a card!
Anyone who pays £2.50 for a coffee gets what they deserve.
For goodness sake buy a flask and make your own.
Starbucks just pander to lazy people who say they haven’t time to make a flask of coffee but will spend hours on Facebook.
Get a flask and GET A LIFE
Check out the coffee at javabean coffee in gloucester road arcade, london – they roast their own beans – fresh, make a big deal that the perfect espresso is fresh aribica beans (whatever they are) and the extraction is always 25 seconds. I tell you what – there coffee is the best I’ve ever tasted – unbelievable
yessssss yesssssss
starbucks trying to establish itself of being trendy and cool while ripping off the young people with it’s over-prised coffee. Now they are getting political with their commercials.I would tell young people that they are being ripped off by starbucks.
F-u starbucks you corporate pigs.
I am not even so sure whether they (Starbucks) pay VAT on all stuff…coz most beverages are Zero-rated for VAT…I know some hot ones incur some VAT but it depends on which…any clarification on this, editor???
VAT is charged on Coffee if the shop is VAT registered. A cafe has to register for VAT if if has a turnover of more than 75K. So at Starbucks, Costa e.t.c. VAT is applied to coffee.
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