73. Starbucks did what?? Balancing pricing, profitability, and customer experience

SUMMARY:

In this episode, we dive into Starbucks’ recent decision to remove the upcharge for alternative milks and explore the broader implications for coffee businesses. While this move may seem like a simple win for consumers, industry insiders know the real costs behind alternative milk pricing. We break down how Starbucks is likely absorbing and redistributing these costs, the psychology behind reducing sticker shock, and what this strategy means for smaller coffee shops trying to balance pricing, profitability, and customer experience.

We also discuss the ever-growing challenge of price increases in the coffee industry and how businesses can navigate customer perception. From strategic price adjustments to creating value-driven experiences, we explore ways to maintain customer trust while keeping operations sustainable. Whether you're a coffee shop owner, barista, or just a coffee enthusiast, this episode offers valuable insights into the business side of your daily brew.

Minute by Minute:

0:00 Introduction + Starbucks is not upcharging anymore

4:36 The balance between what we charge and profitability

9:53 “The customer”

14:45 Customer reactions to changing prices

19:10 Always keep an eye on Starbucks operationally