This week, international coffee chain Starbucks is set to increase the prices of featured coffee items on its menu all over the world; Greece is the only nation whose rates have declined, as reported in the Wall Street Journal.
WSJ writer Julie Jargon penned, "Starting Tuesday, some beverages in Starbucks U.S. company-operated stores will increase by between five cents and 20 cents...A 20-ounce, venti-sized cup of brewed coffee, for example, will cost $2.35, an increase of either 10 cents or 15 cents, depending on the market".
Jargon describes how Starbucks has considerably lowered Greek coffee prices. After going to a Thessaloniki location two weeks ago, she noted that a double espresso is now 2 euros, that used to be 2.60 euros, while a Freddo cappuccino is now 3.95 euros, from a previous 4.65 euros. An espresso macchiato is 2.50 euros compared to its former price of 2.95 euros.
The WSJ journalists questioned the Greek barista on duty about the drop in prices. She was told that the price discount was due to a recent Value Added Tax reduction. Jargon believes that the price cuts are a result of much more than a VAT drop and attributes it to Starbuck's competitor Mikel. Established in Larisa in 2008, Mikel has grown in popularity with the younger generations and surpasses Starbucks in its amount of stores.
Mikel has 20 locations in Thessaloniki, while Starbucks has only 4. The two have many locations standing side by side. Mikel continually offers promotions that attract an increase in customers. Jargon documents that this has instilled a price war from Starbucks, that has not been experienced in other foreign markets.
(Source: http://www.forbes.com/sites/panosmourdoukoutas/2014/06/22/starbucks-is-cutting-coffee-prices-in-greece/ & http://online.wsj.com/news/articles/SB20001424052702303850204579636211927814806?mod=yahoo_itp&mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB20001424052702303850204579636211927814806.html%3Fmod%3Dyahoo_itp)
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