Business

Starbucks Extracts More Money with Pricier Drinks, Food

Published

11 years ago

April 24, 2015

In this March 18, 2015 file photo, Starbucks CEO Howard Schultz speaks at the coffee company's annual shareholders meeting in Seattle. Starbucks will report earnings Thursday April 23, 2015. (AP Photo/Ted S. Warren, File)

In this March 18, 2015 file photo, Starbucks CEO Howard Schultz speaks at the coffee company’s annual shareholders meeting in Seattle. (AP Photo/Ted S. Warren, File)

CANDICE CHOI, AP Food Industry Writer

NEW YORK (AP) — 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 percent at established U.S. stores. The company said much of the increase came from higher spending per visit.

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, Starbucks Chief Financial Officer Scott Maw said. He noted the company is also charging more for baked goods like croissants, which are being made with new recipes.

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

In a conference call with analysts, CEO Howard Schultz said the “Flat White” and new cold-brewed iced coffees also help extend the company’s position as a “coffee authority.”

Dunkin’ Donuts, which has been trying to appeal to new coffee drinkers with the introduction of a dark roast last year, said earlier in the day that sales rose 2.7 percent at established U.S. locations.

During its second fiscal quarter, Starbucks said its U.S. sales bump was also helped by a 2 percent uptick in customer traffic, which translated into an additional 10 million visits. That was driven in part by people coming in to redeem the $1.6 billion that was loaded onto gift cards during the holidays.

The company is also convincing people to buy more food in general.

Overall food sales in the U.S. were up 16 percent from a year ago, while breakfast sandwich sales were up 35 percent, the company said. A key part of Starbucks’ strategy for continuing to drive up sales is its expansion into the afternoons and evenings, when its stores tend to be less busy. Already, Starbucks says about a third of orders include a food item and that the figure has been ticking higher.

The company is also 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.

Globally, sales at established locations rose 7 percent during the period. That included a 12 percent increase in Asia, while the unit encompassing Europe, the Middle East and Africa rose 2 percent.

Starbucks still expects global sales at established locations to rise in the mid-single digits for the year.

For the period ended March 29, Starbucks’ profit jumped 16 percent to $494.9 million, or 33 cents per share, which was in line with expectations.

Total revenue rose 18 percent to $4.56 billion, more than the $4.53 billion Wall Street expected.

Shares of Starbucks Corp. were up 4.3 percent at $51.54 in extended trading.

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Follow Candice Choi at www.twitter.com/candicechoi

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Financial Wellness and Mental Health: Managing Money Stress in College 

While everyone’s financial situation is unique, several common sources of stress have the potential to strain your financial health. These include financial and economic uncertainty, existing debts, unexpected expenses, and mental or physical health changes. Financial stress may differ from situation to situation, but understanding the factors contributing to yours may help you begin to craft a plan for your unique circumstances.

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March 17, 2026

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As a college student, managing financial responsibilities can be stressful.

If you’ve found yourself staying up late thinking about your finances or just feeling anxious overall about your financial future, you’re not alone. In one survey, 78% of college students who reported financial stress had negative impacts on their mental health, and 59% considered dropping out. While finances can impact overall stress, taking steps to manage your finances can support your mental, emotional and physical well-being.

When it comes to money, the sources of stress may look different for each student, but identifying the underlying causes and setting goals accordingly may help you feel more confident about your financial future.

Consider these strategies to help improve your financial wellness and reduce stress.

Understand what causes financial stress

2. Determine your financial priorities

Start by reflecting on your financial priorities. For students this often includes paying for school or paying off student loans, studying abroad, saving for spring break, building an emergency fund, paying down credit card debt or buying a car. Name the milestones that are most important to you, and plan accordingly.

3. Create a plan and stick to it

While setting actionable goals starts you on the journey to better financial health, it’s essential to craft a plan to follow through. Identifying and committing to a savings plan may give you a greater sense of control over your finances, which may help reduce your stress. Creating and sticking to a budget allows you to better track where your money is going so you may spend less and save more.

4. Pay down debt

Many students have some form of debt and want to make progress toward reducing their debt obligations. One option is the debt avalanche method, which focuses on paying off your debt with the highest interest rate first, then moving on to the debt with the next-highest interest rate. Another is the debt snowball method, which builds momentum by paying off your smallest debt balance, and then working your way up to the largest amounts.

5. Build your financial resilience

Some financial stress may be inevitable, but building financial resilience may allow you to overcome obstacles more easily. The more you learn about managing your money, for instance, the more prepared you’ll feel if the unexpected happens. Growing your emergency savings also may increase resilience since you’ll be more financially prepared to cover unexpected expenses or pay your living expenses.

6. Seek help and support

Many colleges have resources to help students experiencing financial stress, like financial literacy courses or funds that provide some assistance for students in need. Talk to your admissions counselor or advisor about your concerns, and they can direct you to sources of support. Your school’s counseling center can also be a great resource for mental health assistance if you’re struggling with financial stress.

The bottom line

Financial stress can affect college students’ health and wellbeing, but it doesn’t have to derail your dreams. Setting smart financial goals and developing simple plans to achieve them may help ease your stress. Revisit and adjust your plan as needed to ensure it continues to work for you, and seek additional support on campus as needed to help keep you on track.

 JPMorgan Chase Bank, N.A. Member FDIC