Is Starbucks too expensive?

Back in December when Teddys visited Mexico City, he remarked on how expensive Starbucks is in Mexico. In part this is due to the fact, I've checked, that a lot of their imlpements are imported (cups, covers, napkins(really) and other things).

Anyway, I flew to Monterrey and back today. I had time to kill at the airport (not important why) and I needed caffeine. So I got a "grande" hot mocha for 64 pesos. That's about $4.80 US. It struck me as expensive, but not that expensive, too-dark roast and all.

But then I had lunch at Carl's Jr. consisting of a chicken sandwich, onion rings and a "medium" soda with unlimited refills, for 69 pesos, or just US $0.35 more than one cup of coffee.

Now I think Starbucks = highway robbery.

Why would I pay $4 for something I can make at home for a few cents?

USA Today ran an article today that stated CEO Howard Schultz made $142 million in 2012, and received pay and stock dividends of $163 million in 2013. So yes, Starbucks is overpriced.

I guess it works well enough at its price point. Sometimes companies don't translate their success to other countries though. It's not marketed to be the bargain coffee drink place.

Quote: zippyboy

Why would I pay $4 for something I can make at home for a few cents?

USA Today ran an article today that stated CEO Howard Schultz made $142 million in 2012, and received pay and stock dividends of $163 million in 2013. So yes, Starbucks is overpriced.

My, what an unfortunate..ahem...coincidence...<chortle>. I have never understood the appeal of Starbuck's house coffee. Tastes like it's burned to me. Now, a good rich Columbian, that's a wonderful thing. Also 100% Kona coffee, which is outstanding but definitely distinctive.

Quote: Nareed

Back in December when Teddys visited Mexico City, he remarked on how expensive Starbucks is in Mexico.

I think that most people are aware of the "Big Mac Index" which has been tracking the price of a Big Mac around the world since 1986.
In 2012 a Big Mac in the USA was $4.20 while in Mexico it was 37 pesos. At the standard exchange rate of 13.68 pesos per dollar that would imply that the Big Mac cost 37 pesos/13.68 = $2.704678.

Under the whimsical purchasing power index where the only thing available to purchase is a Big Mac the effective exchange rate is
37 pesos/BigMac / 4.20 dollars/BigMac = 8.8095 pesos/dollar. So the pesos is undervalued by 8.8095/13.68-1=-35.58%.


Actually the above analysis does not include the fact that a Big Mac is an incredibly overpriced lunch in rural Mexico. You frequently see economical meals for 35 to 40 pesos. There were only 3 McDonalds in all of Oaxaca (a state of 3 million people).


But anything that has to be entirely imported into Mexico (like most wines) are outrageously priced.

Latest Big Mac prices using nominal exchange rate
dollar_price Country
$1.54 India
$2.16 South Africa
$2.23 Malaysia
$2.27 Ukraine
$2.30 Indonesia
$2.32 Hong Kong
$2.43 Egypt
$2.62 Taiwan
$2.62 Russia
$2.68 Sri Lanka
$2.74 China
$2.78 Mexico
$2.92 Thailand
$2.93 Saudi Arabia
$2.97 Japan
$2.98 Philippines
$3.00 Poland
$3.03 Argentina
$3.04 Pakistan
$3.27 UAE
$3.46 Lithuania
$3.47 South Korea
$3.47 Czech Republic
$3.56 Peru
$3.60 Singapore
$3.69 Chile
$3.76 Turkey
$3.80 Estonia
$3.85 Hungary
$4.07 Portugal
$4.14 Greece
$4.28 Costa Rica
$4.34 Colombia
$4.47 Australia
$4.57 New Zealand
$4.60 Austria
$4.62 United States
$4.63 Britain
$4.68 Netherlands
$4.69 Ireland
$4.91 Uruguay
$4.95 Spain
$4.96 Euro area
$4.98 Germany
$5.01 Canada
$5.02 Israel
$5.15 France
$5.18 Denmark
$5.22 Italy
$5.25 Brazil
$5.36 Belgium
$5.56 Finland
$6.29 Sweden
$7.14 Switzerland
$7.15 Venezuela
$7.80 Norway

BTW: Did you notice that the most expensive Big Macs are Norway and Venezuela. As Norway is one of the most expensive places in the world that is not surprising, but why should Venezuela be that high?

I've never particularly cared for Starbucks coffee, their prices or their overly cluttered floorspace.

One needed only to visit an independent coffee shop to see the differences. Each drink timed, coffee ice cubes in your iced coffee, instantly provided pastries, original art works, comfortable couches, free dog biscuits for all four footed arrivals, intellectual games area for both adults and children, carpeted play area for children. All of it provided at better quality than Starbucks coffee and better use of space.

I don't drink coffee so I think those who do are nuts.
They spend all day worrying about the next cup. And
when they get it, they bitch about how bad it is. It
never fails when I eat out with just my wife or with
others, there's always a coffee drama at the table,

Where's that waitress with the coffee. Watch for her,
I'm almost out. This coffee is terrible, yet they drink
3 cups. Why is there no half and half? 5min speech
on why they only use half and half. Even when its
over it goes on. I drank too much of that coffee.
Why didn't I get decaf, I'll be up half the night. At
the Vegas airport my wife got an $8 cup of Starbucks
and I asked her if she was fricking insane. The looks
on the faces of the people in line was frightening,
they all looked half dead.

Screw coffee, nasty obnoxious habit.

Quote: Fleastiff

I've never particularly cared for Starbucks coffee, their prices or their overly cluttered floorspace.

One needed only to visit an independent coffee shop to see the differences. Each drink timed, coffee ice cubes in your iced coffee, instantly provided pastries, original art works, comfortable couches, free dog biscuits for all four footed arrivals, intellectual games area for both adults and children, carpeted play area for children. All of it provided at better quality than Starbucks coffee and better use of space.

Starbucks seem to have taken a concept that was small and local, branded it and made it worldwide. This means other places had to up their game. It's all good competition. I don't particularly like starbucks coffee, but on the plus side, it's consistent and you know what you'll get. And it's better than MacD's dirty brown water.

I voted no, by the way. It's obviously not too expensive, as people pay that price for it and continue to keep Starbucks in profits. And therefore, the price must be about right.

Quote: TheCesspit

And it's better than MacD's dirty brown water.

You may not have been to McD's in a while. In 2009,the recession had taken hold and McDonald’s kicked the Coffee Wars into over rive with the introduction of McCafe coffees, including lattes, cappuccinos and mochas. In 2010, to further promote the coffeehouse atmosphere, McDonald’s began offering free Wi-Fi in over 11,000 restaurants in the United States.

Starbucks began pushing the really expensive drinks over the standard cup of coffee.

In 2002, revving up to take its place in the Coffee Wars, Dunkin’s Donuts launched an espresso revolution with a new line of espressos, lattes and cappuccinos. In 2007, Dunkin’ Donuts partnered with Proctor & Gamble to introduce coffee drinks at retail outlets including supermarkets and club stores .

My first MacD's coffee was just after they launched the McCafe. It was terrible. I can go to Tim Hortons for the same price, and better coffee.

But to be fair, I did get a free Americano just before my last race, and it did the trick, and was better, but then I find getting jacked up on caffiene and sugar helps me run anyways.