By Quentin Fottrell
As Starbucks opened its new flagship store in New York’s Times Square – in addition to its 7,000 stores worldwide – Pay Dirt sat down with Starbucks Coffee’s U.S. president Cliff Burrows to talk about coffee prices and consumer trends.
Pay Dirt: Starbucks is not known for cheap coffee. A Venti (Large) Frappuccino costs $5.45. Can we see price hikes on drinks?
Burrows: It’s a fine balance. We continue to review it by store and by individual beverage. We’ve had inflationary pressures in coffee, cocoa, dairy products and fuel, all of which have presented a unique challenge for Starbucks. At times in the past year, coffee prices actually doubled. We raised prices on our whole bean packaged coffee [by 17%] in July. Customer confidence remains fragile. We need to get the balance right and put ourselves in the customer’s shoes, but also we have to live in the real world.
My local Starbucks on 8th Avenue and 19th Street in New York is freezing, and some of the sockets are covered. I get the impression that they want me out.
Tell them. They want your feedback. The temperature depends on the location and the time of year. The vast majority have sockets. Times Square gets a lot of tourist and shoppers, so we need to have more space.
How do consumer demands differ from region to region?
In the U.K., 100% of the coffee is Fair Trade [an organization that promotes better working conditions and sustainability among farmers] and that’s down to consumer demand. Not all the coffee is Fair Trade in the U.S., but it’s 100% ethically sourced. In the U.S., most of the whole beans are Fair Trade.
And what about consumer tastes?
On the East Coast, they like sugar and cream. On the West Coast, they tend to go for dark roast.
Standing in line can be tiresome. Especially at rush hour those queues can be long.
But have you seen how fast they move? Our aim is that you should be looked after in no more than three minutes.
Pay Dirt readers, how long do you stand in line at Starbucks? And what’s the most amount of money you would pay for a coffee?