What's happened
As of June 24, 2025, Starbucks has implemented new charges for custom drink modifications, including 80 cents for syrups and sauces, $1 for matcha powder, and 50 cents for dried fruit. This change aims to address rising costs and inflation while maintaining profit margins.
What's behind the headline?
Pricing Strategy Shift
- Starbucks' new pricing reflects a broader trend in the food and beverage industry where customization comes at a cost.
- The flat fee for syrups and sauces simplifies pricing for customers, contrasting with previous variable pricing based on flavor or drink type.
- This move may deter some customers from ordering elaborate drinks, potentially impacting sales of high-margin custom beverages.
Consumer Reaction
- Customers have expressed mixed feelings about the new charges, with some understanding the rationale behind them while others feel frustrated by the additional costs.
- The introduction of a pricing update feature in the app aims to enhance transparency, allowing customers to see how modifications affect their total before checkout.
Future Implications
- As inflation continues to affect the economy, Starbucks' pricing adjustments may set a precedent for other chains to follow.
- The success of this strategy will depend on customer acceptance and whether it leads to a decrease in custom orders or overall sales.
What the papers say
According to Business Insider UK, Starbucks has introduced a flat fee of 80 cents for any combination of sauces and syrups, which was previously variable based on the flavor or drink type. This change, effective June 24, 2025, is part of a broader strategy to manage rising costs and inflation. CEO Brian Niccol's leadership is pivotal in this transition, as noted in multiple reports. Bloomberg also highlighted that matcha powder will now cost $1 per scoop, reflecting the company's need to maintain profit margins amidst changing consumer behaviors. The new pricing structure aims to simplify the ordering process while addressing operational challenges.
How we got here
Starbucks has been adjusting its pricing strategy amid rising operational costs and a shift in consumer behavior towards custom orders, particularly during the pandemic. CEO Brian Niccol is leading a turnaround plan to address declining sales.
Go deeper
- What are the new charges for Starbucks drinks?
- How are customers reacting to the price changes?
- What led to Starbucks' decision to change its pricing strategy?
Common question
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Starbucks Corporation is an American multinational chain of coffeehouses and roastery reserves headquartered in Seattle, Washington.
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The United States of America, commonly known as the United States or America, is a country mostly located in central North America, between Canada and Mexico.
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Brian R. Niccol (born 1974) is an American businessman and the chairman and chief executive officer of Starbucks, a role which he started on September 9, 2024, replacing Laxman Narasimhan. He previously was chairman and CEO of Chipotle until August 31...