Starbucks Sales Are Up Because People Are Willing To Spend More On Pricy Menu Items

(frankieleon)

In the bid to part customers with their hard-earned cash, Starbucks is raking in the cash these days partly because people are willing to spend money on new, pricier menu items. As it turns out, hiking the price of a croissant is something we’re willing to deal with.

The coffee chain reported a higher quarterly profit on Thursday, reports the Associated Press, with a 7% jump in sales at U.S. stores.

Much of that boost is because people are spending more money every time they walk through those doors for their caffeine fix — things like the “Flat White” espresso drink and Teavana iced teas push sales up because they cost more than other drinks, Starbucks Chief Financial Officer Scott Maw said. The company is also charging more for some baked goods, like croissants that are being made with new recipes.

Beyond Starbucks, American consumers are buying more grub in general, with a 16% bump in food sales from a year ago. Breakfast sandwich sales alone are up 35%, Starbucks said, with about a third of their orders at stores including a food item.

And while many consumers are on the lookout for a deal, there are plenty who don’t mind paying more for something they see as a worthy cost.

“What we’re seeing is a premiumization, a trade-up,” Maw said in an interview.

Starbucks extracts more money with pricier drinks, food [Associated Press]

by Mary Beth Quirk via Consumerist