Why is Starbucks So Expensive Yet Still Popular? The Reasons Behind Starbucks' High Prices

As everyone knows, Starbucks has always been "a law unto itself." In recent years, as other domestic coffee chain brands have continuously competed for customers through "price wars" and "discount promotions," Starbucks has maintained its drink prices at around 30 RMB per person, showing no intention of launching cheaper beverages to attract consumers. Recently, they even quietly phased out their cheapest "Coffee of the Week," making consumers wonder how much longer Starbucks can sustain itself in the domestic market.

Why Starbucks Stands Firm on Premium Pricing

However, looking at the broader picture, Starbucks' approach is correct. If Starbucks participated in these "low-price" campaigns, it would only damage the brand's development. First, it would have to engage in fierce competition with other coffee chain brands, and second, it would negatively impact the brand image. When a coffee brand that has always taken a premium, business-oriented route suddenly lowers its prices, consumers' first thoughts would be: "Ah~ Starbucks coffee quality has declined?" Or: "Ah~ Starbucks ultimately couldn't compete in the Chinese market!"

Therefore, for Starbucks, even if sales aren't as high as other chain brands and the public passionately criticizes them for being expensive and not worth it, they must maintain their consistently "aloof" image because their primary customer base consists of business professionals. These consumers typically need an environment for working or conversation, not necessarily caring deeply about the coffee's taste. After all, would those who truly care about coffee flavor choose to drink at chain coffee shops?

The "Third Space" Philosophy

"You take your fast-moving consumer route, I'll take my third space." In this fast-paced era where most businesses are unwilling to rent large spaces to provide dine-in services, Starbucks still adheres to its "third space" concept. From providing seating in stores for customers to rest and work, to offering private meeting rooms for business professionals to have confidential conversations, to introducing the "1971 Living Room" that satisfies personalized space needs for gatherings, meetings, work, and study.

Starbucks' goal is to retain those who need this third scenario to help with work, relieve life stress, or for leisure gatherings, allowing people in need to catch their breath amidst the "hanging pressures" (work stress, life stress, etc.). As a Cantonese saying goes, "If you want to eat salted fish, you must endure the thirst" (you must accept the consequences of your choices). Since Starbucks does everything possible to provide comfortable spaces, expecting low drink prices is impossible.

Understanding the True Cost

General consumers think Starbucks is expensive because its prices far exceed the material costs, making them feel it's overpriced. But have people considered Starbucks' other costs? Large store rent, utilities, taxes, financing costs, equipment, labor (including designer fees for each store), and possibly franchise fees, among others. To have a comfortable space, one must pay the corresponding price—this is inevitable. Just like stir-fried beef noodles at a street food stall versus a five-star restaurant, why does the five-star restaurant sell them for so much more, yet people still go there? It's for the environment.

Personal Choice and Market Dynamics

Although we are all working people, everyone has different pursuits and consumption levels. Why consumers choose Starbucks is their own business. As long as they feel it's worth it, that's what matters. Starbucks never forces anyone to consume. There's no need to think that others have higher consumption levels and dismiss them as "showing off"—that's simply their affordable consumption level. Whether the coffee tastes good is determined by the person buying it, and they won't abandon their pursuits or preferred coffee flavors because of your sour remarks.

The supply-demand relationship in the market is like marriage—it's a two-way choice. Consumers have the right to choose coffee shops they accept, and Starbucks can similarly choose its target customer base. Starbucks has no need to lower prices to attract customers who aren't its target audience. Consumers should choose their consumption venues based on their own needs, rather than knowing something is expensive yet still buying it and then proclaiming everywhere that it's not worth it.

Image source: Internet

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