The world's cheapest Starbucks - and the most expensive

Why is Starbucks cheaper in the UK?

BANGKOK, THAILAND - August 12, 2014: A cup of Starbucks coffee. Starbucks is the world's largest coffee house with over 20,000 sNobody ever went into a coffee chain and marvelled at how cheap the drinks were. However, a new study claims that perhaps we're simply failing to see the bargains that are right in front of our eyes.

The study, by Voucherbox, found that the UK is one of the cheapest places to buy a Starbucks coffee in the world. The priciest is in Bern, Switzerland - where drinks cost almost twice as much as they do in the UK.

Worldwide

The worldwide prices vary enormously. Bern came out as the priciest, with Warsaw and Ottawa at the other end of the spectrum. An Americano in Bern, for example, is 139% more expensive than one in Warsaw, and a cappuccino or latte is 109% pricier. Ottawa, Canada, meanwhile, offers the cheapest Americano at £1.72.

There are sensible and logical reasons for this. When Ikea was asked why its products were up to three times more expensive in the UK than in Sweden, it explained that every international retailer comes up with a price based on not just the cost of the raw materials, but also staff costs and rental costs. Local competition is also taken into consideration, and currency exchange rates play their part.

Many of these variations don't just apply internationally, because there are regional differences within the UK itself. Most of the stores nationwide are 5% cheaper than London for Americanos, and 2% cheaper for cappuccinos and lattes. And the cheapest coffees of all are in Plymouth.

Where the price variations become stranger is when you look at the cost of various drinks within each branch.

Odd differences

Some 18 of the 22 branches included in the survey charge the same amount for a latte as a cappuccino, but customers in Oslo, Athens and Helsinki pay up to 20% more for a latte.

You could make a case that less foam means there's more milk in a latte than a cappuccino, but that wouldn't explain why the Berlin branch in the survey charged more for a cappuccino than a latte - 9% more.

Likewise with the Americano: most stores charged less for an Americano than the milky drinks, but the price differential ranged from 17p in Vienna to £1.16 in Copenhagen - and in Athens an Americano is actually 30p cheaper than a latte.

The fact is that these variations bear little or no relation to the cost of the ingredients. A study by retail analyst Allegra Strategies calculated that the cost of the cup, lid and stirrer was roughly twice as much as the cost of the coffee. The cost of rent and bills was almost ten times the cost of the drink itself, and staff wages were around seven times the cost of the coffee.

The branches are therefore free to look at demand for each type of coffee - and what is drunk most in the branch. They can then tweak the pricing to ensure they cover their overheads and make as much profit as possible without sending their customers to the competition.

Looked at this way it's hardly surprising that we don't find ourselves popping into our nearest coffee shop and thinking "£2.45? Well that's a cheap cup of coffee."

But what do you think? Is your coffee a bargain? Let is know in the comments.


Shopping: when spending more isn't always better

Shopping: when spending more isn't always better