Why Is Starbucks So Expensive? (Top 10 Reasons)

 

If you have taken a trip to Starbucks for the first time, you probably noticed that it is quite costly.

Starbucks is, without a doubt, an expensive place to get coffee and snacks.

However, millions of people still frequent Starbucks every single day.

If you have ever wondered why Starbucks is so expensive, here are a few reasons that will help you understand.

 

Why Is Starbucks So Expensive?

 

1. Convenience

 

In the morning, before work and school, people are generally quite busy.

They have certain responsibilities which must be taken care of.

There are usually kids to be fed and pets to be walked.

Sometimes there is just no time to make coffee.

If this is the case in your home, you probably understand that convenience is one of the reasons that Starbucks is so expensive.

You will pay extra to have someone make coffee for you as opposed to having to make it yourself.

Usually, the time it takes to get your coffee is quite a bit faster.

You won’t have a coffee pot to clean, and you won’t need to even wash your coffee cup.

If your Starbucks has a drive-through, you may not even have to get out of your car when you go to get your coffee.

Certainly, this is quite a lot of convenience and something most people don’t mind paying for.

If you purchase the ground Starbucks coffee to make at home, you can certainly save money.

However, most people say that it doesn’t taste quite as good, and you lose a bit of the experience.

 

2. Popularity

 

Starbucks is a very popular place to get coffee.

Most coffee lovers have had Starbucks at some point in their life.

Along with Dunkin Donuts, Starbucks is probably the most well-known coffee in America.

Starbucks is also a global brand.

There are Starbucks locations all over the world.

Sometimes people would like to find something familiar like a Starbucks when they are away from their home country.

The Starbucks brand and name are well known and very popular as well.

You will notice that the popularity of Starbucks has only increased over the years.

As people need their caffeine more and more, it has been easy for Starbucks to grow in popularity.

Caffeine is something people get addicted to.

They end up needing it to get their day started and head out for work.

Of course, when you enjoy a coffee, and then find you actually need that coffee to get through your day, it will become quite popular.

People say that the quality, the ambiance, and the customer service also have helped Starbucks grow.

As Starbucks has gotten more popular, the prices of their products have continued to go up.

They have reached the point now where they can charge what they need to in order to make money.

If they lose a few customers, that is a risk they are willing to take.

The majority of people are still going to frequent the establishment.

 

3. Labor

 

Labor costs are some of the highest costs that any business has to endure.

If you have employees, you are going to spend a lot of money to keep them employed.

Not only are there wages and taxes to consider, but you will have to handle the mistakes that employees make as well.

If you notice that, for the last two weeks, an employee had been pressing the wrong button while charging people, or you have a bad employee who has been taking merchandise, you will have to absorb those costs.

Regardless of the situation or the location, employees and labor cost money.

There is really no way around this, and for the number of customers Starbucks sees, they have to have a lot of employees.

Most Starbucks locations are going to have quite a few employees.

During the busy shift in the morning, the number of people who are going to need service can be astronomical.

Once the morning rush is finished, the crowds tend to die down, and a few employees will probably be released.

In the afternoon and then into the evening, it can get quite busy yet again, and more employees will have to come back on duty.

Managing this and handling employee issues is a major reason Starbucks is so expensive.

 

4. Employee Training

 

Not everyone is cut out for working at Starbucks.

The pace is very fast, and you have to have a very good understanding of the coffee business.

If you don’t like coffee, don’t drink coffee, and have never made a cup in your life, this may not be the job for you.

Starbucks employees have to go through quite a bit of training to understand how to manage this career.

Being a barista at Starbucks is similar to becoming a bartender.

There are so many different drinks and combinations of drinks that people can order, it will take some time to learn.

Add in a line of twenty people out the door and try to make all of these drinks correctly in a fast-paced environment.

This can be a high-pressure job.

Also, before people get their morning coffee, they can be quite cranky and irritable to deal with.

Employees need to be trained for weeks before they are ready to handle themselves on their own.

They will have training on how to make coffee drinks as well as how to deal with people.

This training takes money, and this will affect the price of the coffee.

The good news here is that you are probably going to get a coffee that is made correctly by a friendly employee.

 

5. Overhead Costs

 

Like any business, Starbucks has quite a bit of overhead.

Since this is such a large company, you will see that their expenses are quite high.

In addition to things like rent, electricity, supplies, and employee costs, there are also marketing and advertising.

Companies like Starbucks also have employees at many different levels.

There are higher up executives who map out and plan the future of the company, human resources, communications, and more.

The overhead costs for a company of this size are very large.

If they do not sell enough coffee, the company could very easily start to have negative months or quarters.

The margins on a cup of coffee, as expensive as it is, are still small.

Starbucks charges what they need to make sure they are able to cover all of the overhead and still make a profit on each cup they sell.

If they didn’t, there would be no point in keeping the doors of the establishment open.

 

6. Locations

 

Have you noticed that the Starbucks locations are always in a prime spot?

You won’t usually find a Starbucks in a location that is difficult to find or away from other stores and major highways.

Starbucks stores are always in prime locations with the most exposure to people.

Starbucks is very picky about where they place their locations.

They want to make sure they have lots of people available to purchase the coffee.

With a business like this, the volume is what matters.

Since each purchase is a relatively low price, the number of people who get to a Starbucks location in a day is essential.

The problem with being in these prime locations is that the real estate and the rent are going to be much higher.

That will need to be made up somewhere, and it is usually recovered in the price of the coffee itself.

Although this is a reason your Starbucks is so expensive, it is another part of the convenience.

People want a Starbucks that is on their way to work or school.

Having to drive out of the way is going to make it more difficult to sell and less convenient.

 

7. Coffee Shop Setting

 

A coffee shop is a setting where people enjoy spending time.

In a coffee shop, you can get work done or socialize.

It is usually a friendly place to be, and Starbucks doesn’t seem to mind if you stay for the day or you stay for a few hours.

Chances are, if you stay for the day, you will be purchasing more products from them throughout the day.

A coffee shop can be similar to a bar when it comes to camaraderie and companionship as well.

For people who are not drinkers, a coffee shop can offer a great alternative to a bar when it comes to social interaction.

Chances are the barista at Starbucks will be friendly and introduce themselves to you.

If you frequent the same Starbucks often, you will get to know some of the same people.

This is a lot for Starbucks to offer, all for the price of one cup of coffee.

Therefore, the price of the coffee you pay is going to be quite a bit higher than other coffee shops.

These other shops may not offer the same feel as Starbucks does.

 

8. Quality of Product

 

People are very picky when it comes to coffee.

Some will be fans of Starbucks, and others will say that it is gross.

Essentially, you will have to try Starbucks for yourself to know whether or not you think it is a quality product.

The bottom line is that Starbucks is known for using quality ingredients in their food and their coffee.

They use good milk, high-end coffee, and top-of-the-line spices in some of their foods.

You won’t have to worry about the food they sell being bad or sold past the date that it should be.

Starbucks has very high standards when it comes to the quality of ingredients.

Each Starbucks location will have managers in place who will help to make sure everything is meeting or exceeding the standards of the company.

If you are worried about whether or not you are getting a quality cup of coffee when you choose Starbucks, you likely don’t need to be concerned.

Chances are the coffee will be just as good if not better than anywhere else you might purchase a morning cup of coffee.

 

9. Upsell

 

Starbucks trains its employees to upsell.

If you purchase a cup of coffee, they may try and get you to go for a muffin or something to go with it.

They may also see if you want to add a certain flavor or cream to your coffee.

Although this can sometimes get annoying, you must remember that the Starbucks employee is just doing their job.

The upsell makes Starbucks a great deal of money each year.

People sometimes just need that extra little push, and then they will end up purchasing something they probably don’t really need.

The upsell is something you can easily say no to if you want to try and save money at Starbucks.

Most people will probably end up saying yes from time to time, and this is another reason Starbucks gets so expensive.

 

10. Wi-Fi

 

Internet is always available inside Starbucks.

You will be able to sign into their high-speed internet and work from the Starbucks coffee shop.

The price of the internet can be quite high.

For some people, the price is not worth having at their home or having a large data package on their phone either.

Therefore, having the ability to use Wi-Fi in a location like Starbucks for free is a great benefit.

Many people who work remotely will go to Starbucks to get out of their home and work in a comfortable and friendly environment.

 

How to Save Money at Starbucks

 

Now that you know how expensive Starbucks is and why, it’s time to see if you can save a bit of money when you go there.

Unfortunately, there are no major breakthroughs when it comes to saving money at Starbucks.

If you frequent there every day, you will probably still spend quite a bit in the course of a year.

There are a few ways to try and keep the pricing down.

You can look for coupons in the mail, but they don’t come all that often.

The best possible way to save money is to try to say no to all the extras.

When you have the option for whipped cream and a slice of banana bread, try to say no.

If you stick with the basic cup of coffee, you are going to end up saving quite a bit of money.

If you can keep the size of the coffee to a medium, you will also save a lot.

When you choose the very large cups, the pricing gets out of hand as well.

Another way to think of Starbucks coffee is to think of it as the experience as well.

If you can stay to do some work, take advantage of the Wi-Fi, or have a social experience with some friends, you will get great value for your coffee.

When you go to the drive-through and leave within a few seconds, you will end up paying quite a bit more for your cup.

Of course, there will be days when this may not be possible, but try to enjoy the experience that comes along with the Starbucks coffee you are purchasing.

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