Last week, Starbucks devotees across the world gasped when the company announced a price increase on menu items for the third time in as many years. Insiders say the price hikes will run from $.15 to $.30 on beverage items, including brewed coffee and additional specialty drinks.
For many, the coffee chain is an occasional treat, but for others, it’s a daily occurrence. Depending on customers beverage preference, people could be spending an additional $50 to $100 on coffee per year if they visit Starbucks daily. Will these price increases drive customers away, or are fans of the brand willing to shell out additional cents for their beloved macchiatos?
We asked 2,080 people their reactions to Starbucks’ menu increase from July 6 to July 8, 2016. The response is as follows:
81% of people responded that they rarely or never go to Starbucks, which makes me think I should be cutting down on my weekly visits. Interestingly enough, these respondents are less likely to consider brand over price when shopping, which perhaps means they grab a gas station cup of coffee on the morning commute in lieu of the green and white status symbol. Also, those who rarely go to Starbucks are more likely to have grandchildren and are less likely to head to the theater to catch a new release.
Let’s focus in on more regular Starbucks visitors. 8% responded that although the pricing might change on items, they’ll still visit Starbucks regularly. Men are less likely to select this answer. In alignment with the company’s roots in Seattle, those who live in the West are more likely to be regular and dedicated Starbucks drinkers, despite the pricing change. Respondents are also more likely to visit the movies at least once a month.
The 7% who responded that they are less likely to go to Starbucks after the price change are nearly twice as likely to be female. This answer skewed younger, and those who selected it were more likely to be employed college graduates. Perhaps budgeting comes into play at this point, and younger female professionals feel they need to forgo the ever more costly Vanilla Skinny Latte to kickstart the day.
3% responded that after the price hikes, they’re kicking the Starbucks habit. I’d like to consider myself a part of this group, but I’d be lying.
So is Starbucks losing customers with the price hikes? Yes and no. It seems regular customers will continue to visit the store. But, as prices continue to rise, Starbucks is losing out on the majority of those polled. The majority surveyed doesn’t prioritize brand over price, which means as the caffeine giant continues to raise prices, they don’t stand a chance of gaining these new customers.
The international chain might want to consider more promotional events, such as the ever-popular Frappuccino Happy Hour to pull more frugal consumers in to try the products and become fans of the brand.