'No plans for Starbucks' killer pricing'

Undeterred by the entry of iconic US-based coffee chain Starbucks at competitive prices, entrenched players such as CCD, Barista and Costa Coffee are unlikely to go in for price war, and plan to continue with differentiated pricing strategy.

Starbucks, which debuted here over the weekend, said it will follow low pricing strategy across all its forthcoming outlets, including the next one at the premium Taj Hotel.

Starbucks, with Tatas as partner, has opted for competitive pricing that is nearly half the coffee chain's charges elsewhere in the world -- with a cup of coffee costing about Rs 80 for a small offering and Rs 165 for a large one.

Asked if the company will have same prices at its all stores, including the one to be launched at the Taj this week, Starbucks Coffee Company Chairman, President and Chief Executive Howard Schultz replied in the affirmative.

"The pricing will be same across all outlets despite Starbucks having the reputation of being a high-end premium brand. We try to have value proposition of all kinds equal to society, especially, when we open in mid-market," Schultz said after the launch of flagship store here on Friday.

When contacted, Cafe Coffee Day (CCD), which runs 1,350 stores, said it will continue to follow a different pricing strategy which includes the rental.

"It is different for different outlets. Our pricing depends on consumer potential and what are the input costs that go into running that store, including rentals. We would have different pricing across different retail points," CCD Marketing President Ramakrishnan K said.

Asked if CCD will revise its price now in view of the entry of Starbucks, Ramakrishnan replied in the negative saying, "Our pricing is not determined by competition but by customers. We have no intention of changing that on the basis of somebody else's pricing."

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