Starbucks is extracting more money from customers with offerings like a “Flat White” espresso drink and revamped baked goods that cost a little more. The Seattle-based chain reported a higher quarterly profit Thursday, with sales jumping 7 per cent at established U.S. stores. The company said much of the increase came from higher spending per visit.
What we’re seeing is a premiumization, a trade-up.
Starbucks Chief Financial Officer Scott Maw
New drinks like the “Flat White” espresso drink and Teavana “Shaken” iced teas help drive up sales because they’re a little pricier than other drinks. The company is also charging more for baked goods like croissants, which are being made with new recipes. Starbucks is testing a program in about 30 locations where it sells alcohol in its cafes in the evenings, and has said plans to expand that more broadly this year.