It seems like something that doesn’t even need to be argued, but I tend to agree with Mark Twain when he said, “Whenever you find yourself on the side of the majority, it is time to pause and reflect.”
People generally regard Starbucks as expensive, and often this can mislead them into thinking that it is superior coffee. But really, is Starbucks really more expensive than the competition?
As you can see in the table below, Starbucks is, on average, 24.71% (69¢) more expensive than other leading chains, including Dunkin Donuts, McDonald’s, Peet’s, Tim Hortons, and Panera Bread.
I was prompted to do this post because one member of a coffee group has repeatedly argued that Starbucks isn’t actually that much more expensive. Well, it seems that is inaccurate – unless nearly ¼ more isn’t considered expensive.
How do Starbucks’ Prices Compare?
So it wasn’t the easiest to compare between brands, so I had to go with some following assumptions:
- Small = Tall = 12oz
- Medium = Grande = 16oz
- Large = Venti = 20oz
- XLs were ignored.
- The average is not including Starbucks’ prices.
- $ Dif = (Starbucks)-(Avg Cost);
- % Dif = ($ Dif)/(Avg Cost)
Starbucks, Peet’s, and Mcdonald’s prices are averaged across all states using this site; the others I had to use an alternate site, set to Michigan prices, using this site because they were not on the other.
| Drink | Starbucks | % Difference | $ Difference | Average Cost | Dunkin‘ | Mcdonald’s | Peet’s | Tim Hortons | Panera |
| Latte, S | $3.25 | 29.61% | $0.74 | $2.51 | $2.69 | $2.00 | $3.30 | $2.04 | – |
| Latte, M | $3.95 | 28.08% | $0.87 | $3.08 | $3.19 | $2.59 | $3.80 | $2.45 | $3.39 |
| Latte, L | $4.25 | 18.85% | $0.67 | $3.58 | $3.59 | $2.99 | $4.30 | $2.86 | $4.14 |
| Mocha, S | $3.75 | 31.89% | $0.91 | $2.84 | – | $2.49 | $3.75 | $2.29 | – |
| Mocha, M | $4.45 | 28.24% | $0.98 | $3.47 | – | $2.99 | $4.30 | $2.70 | $3.89 |
| Mocha, L | $4.75 | 19.57% | $0.78 | $3.97 | – | $3.39 | $4.75 | $3.11 | $4.64 |
| Drip, S | $1.95 | 23.73% | $0.37 | $1.58 | $1.79 | $1 | $2 | $1.30 | $1.79 |
| Drip, M | $2.45 | 32.58% | $0.60 | $1.85 | $2.09 | $1.29 | $2.30 | $1.47 | $2.09 |
| Drip, L | $2.75 | 32.85% | $0.68 | $2.07 | $2.39 | $1.49 | $2.55 | $1.63 | $2.29 |
| Cappuccino, S | $3.25 | 20.59% | $0.56 | $2.70 | $2.69 | $2 | $3.30 | $2.79 | – |
| Cappuccino, Med | $3.95 | 19.12% | $0.63 | $3.32 | $3.19 | $2.59 | $3.80 | $3.61 | $3.39 |
| Cappuccino, L | $4.25 | 11.37% | $0.43 | $3.82 | $3.59 | $2.99 | $4.30 | $4.06 | $4.14 |
What do they do with their money?
Well, there are two obvious good things that they do with the extra funds they acquire through their prices.
- They make a priority of hiring veterans. While the number isn’t super high (25k in 2019), they continue to meet their goals years ahead of schedule. It’s something, and it’s good to see they’re taking care of vets. They also have Military Family Stores, “allowing military families to work, connect, and find transition guidance and information”.
- They state that they spend more on employee healthcare than on coffee beans. That’s over $300 million per year on healthcare (bean cost went unstated), and it’s not just for full-time employees – if you work 20 hours or more a week, you qualify!
Those being said, they don’t fare too well on business ethics. However, they seem to have some initiatives to improve their practices, apparently aiming for 2015 to be 100% ethically sourced coffee; this is from their official site, and doesn’t say whether they hit the goal or not.
TL;DR
Yes, Starbucks is far more expensive than its competition. You could argue that the money goes to good places. Though their business practices aren’t top-notch, they seem to be working to improve their shortcomings and treat their employees well.
They cost, on average, 69¢ more than their competition, which is a ~24% increase.
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