Starbucks Raises Some Prices, Lowers Others

Starbucks has apparently jumped the price of its drinks that take longer to make while lowering the cost charged to customers ordering easier to make brewed coffee, cappuccinos and lattes. (Prices for added expresso shots and flavor are also going up.) According to the L.A. Times, the coffee giant, which has been hit hard by the falling economy, is gambling that people addicted to its pricey carmel-and-whipped-cream confections will pay ten to 30 cents more for them. At the same time, Starbucks hopes it will be able to hold and possibly even expand its customer base that comes in for straight coffee if the price for it is dropped by five, ten or 15 cents, depending on the beverage.

On the other hand, over the past few years Starbucks has been chastened by taste tests conducted by Consumer Reports and other groups that have rated Starbucks coffee inferior to new brews offered by fast food places like McDonalds and Dunkin' Donuts. Whether Starbucks is headed for the drink financially may well depend on how well it persuades people to stay out of these joints for their java.

The Wall Street Journal reports that company baristas were memo'd to "expect customers to be sensitive to pricing changes in this economic climate."