Tuesday, February 10, 2009

Starbucks less overpriced

A mantra of economists is that competition benefits consumers. Apparently, those benefits are now trickling down to those of us who crave caffeine. In an article about Starbucks new "Pairings" value meal, CNN reports this morning that
Research done by William Blair & Co. suggests Starbucks' price premium "has nearly evaporated over the past 18 months, with pricing now largely on par with Dunkin' Donuts." The survey found that when adjusted for size differences, some varieties of Starbucks coffee were cheaper than Dunkin' Donuts. According to the research, McDonald's is still cheaper, but the price gap has narrowed since 2007.
The Pairings will start next month and will include a coffee and food item for just under $4. Give the soft economy some credit for the new value offering along with stiff competition from McDonald's, Dunkin' Donuts, and a host of Starbucks imitators.

Despite the lower prices, brewing your own coffee and fixing your own breakfast remains a cheaper and healthier alternative. Then again who wants to miss out on Handcrafted Lattes and Cinnamon Swirl Coffee Cake. Oops gotta go.