Dunkin’ Donuts has long been favored by coffee aficionados due to the high quality of the coffee sold at a reasonable price. Dunkin’ Donuts is a safe and reliable place to go for delicious coffee that won’t cost you a whole week’s paycheck, sitting somewhere between the pricey Starbucks and the somewhat affordable McCafe.
However, recently it seems like Dunkin Coffee has increased the price for every kind of coffee. Customers are not happy about this sudden change and some of them even give Dunkin up, aiming for another coffee shop that has a more affordable price.
For some people, Dunkin’ Donuts coffee is so expensive that they must question whether this is a universal reform for higher coffee quality or it is another strategy of Dunkin. In this article, let’s find out the truth about why is Dunkin’ Donuts coffee so expensive.
Did Dunkin’ Donuts coffee raise the price of drinks?
A year ago, a Reddit user shared about the coffee price he had purchased from Dunkin Donuts in his home state of North Caroline. His order was a Medium iced coffee with a flavor in it (French and vanilla or caramel) which used to cost him $2.44 after tax a few years ago. Until the last 2 years, it just slightly increased to $2.88 but he was really surprised that recently the price has been $3.45 for each serving.
In other words, Dunkin has no longer kept the initial prices for their drinks which is the price change after 4 years.
Not only Dunkin but also many other companies are affected once inflation occurs. According to Business Insider, Dunkin 2021 has increased its prices by 8% along with Taco Bell, and McDonald’s. Disruption in delivery also influenced coffee supply sources, which big coffee chains like Dunkin Donuts are involved in.
The price change during Dunkin Donuts’ career had happened sometimes before. Though customers might switch to other franchises for more comfortable prices, Dunkin still has for their own a certain number of loyal customers.
The reason for Dunkin Donuts’ expensive coffees
After sometimes changing the price is considered a significant increase in coffee price. This change has happened to different locations indeed. In “A discussion on performance risk of Dunkin’s Brand” by Thong, Lik Hong of University Utara Malaysia, it is stated that
Dunkin’s brand should be always aware of price changes such as the price of raw materials, salary of the employee, and other expenses not to face performance risk.
This study implies some internal and external factors affecting the performance risk of Dunkin. Inflation, debt-to-income ratio, and operating margin might be the problem that leads to price change for Dunkin Donuts. Inflation might be the most severe result that every coffee chain in particular and all the companies in the world, in general, are afraid of.
The national universal economy once suffered inflation, and public and private companies’ activities are also affected. Raising product costs is one of the consequences of inflation among coffee chains due to higher-price pay for real estate and leases, equipment, labor, ingredients, and materials.
Though higher cost leads to customers’ anger, this might be a strategy of Dunkin’ Donuts aiming to avoid negative scenes and maintain survival in the coffee market until certain solutions from the government or the inflation reduction act are implemented.
Is Dunkin more expensive than Starbucks?
Dunkin Donuts and Starbucks are the two most famous and reliable coffee brands in the U.S., U.K., Australia, and other related regions that branches the launch. They have different products as well as business strategies to approach customers in different ways.
As opposed to Starbucks, which offers a high-end customer experience, Dunkin’ is presented as a cheaper alternative for people’s morning coffee. However, the period when Dunkin offered $2 coffee in every store within the whole system has finished. At the present, you have to pay at least more than $2.5 to purchase the cheapest drink from Dunkin which is a small serving of iced coffee without additions but now it reaches up to more than $3. Besides, Starbucks has been criticized for its expensive drinks through the years.
In general, Starbucks drinks cost more than $0.5 than the same drink served at Dunkin on average though some drinks are the same price. Obviously, customers have to pay more to sip a cup of coffee at Starbucks.
Starbucks develops its storage system as coffee houses which provide customers a comfortable place to work, chat with friends or relax, plus free internet access. You would rather have social activity experience at Starbucks than at Dunkin at any time. As a result, the company aims to target customers who seek a premium experience and have higher incomes.
Dunkin is quite different from Starbucks because it is more likely identified to be a coffee seller combined with donuts and other foods as also main features. “Take-away” is also preferred by people who come to Dunkin locations to purchase drinks. Therefore, being different from Starbucks, the target customer of Dunkin is at a lower level compared to Starbucks. That is the reason why Starbucks has a quite higher price than Dunkin’s.