Brew-tally expensive.
Starbucks CEO Brian Niccol is getting roasted for being “out of touch” after defending the company’s $9 cup of coffee – insisting the steep price reflects a “premium experience” offered to customers.
The coffee giant’s chief – who earlier this year was granted access to the company jet for personal travel – said that customers across all income levels are willing and happy to shell out big money for a chance to interact with baristas or score a “great seat” inside the chain.
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“What we’re seeing is people, you know, they want to have a special experience, and regardless of what your income level is, in some cases, a $9 experience does feel like you’re splurging,” Niccol told The Wall Street Journal’s “What’s News AM” podcast.
“And then, what that means is we have to make it worthwhile, right? And then in other cases, people believe, ‘Well this is a really affordable premium experience.’ Because they’re saying like, ‘Well it’s less than $10 and I get a really premium experience,’” he continued.
“So, regardless of where you’re stationed in those income cohorts, we want to make that experience worth your while. And what we know is what’s definitely something that drives that value is to be able to have a great seat, having a great moment of connection with a barista.”
When podcast host Luke Vargas pressed on whether a “K-shaped” economy – where the wealthy recover while everyone else struggles post-pandemic – was hitting Starbucks‘ bottom line, Niccol said it wasn’t impacting the company’s business or revenue.
He even bragged how the coffee chain is “doing really well” with younger generations.
“We’re doing really well with Gen Z and millennials, and then really had strong performances across all income cohorts,” Niccol said, adding customers have described Starbucks visits as a form of escapism.
“It can start with as little as $3 for a traditional cup of coffee. And then obviously you can build your way into all sorts of customized drinks that people love that move that ticket up…. The way we’re going to play the value game is you’re going to feel like it was worth it.”
He insisted customers value the experience over discounts or flashy one-off promotions.
