Starbucks will stop charging customers an extra fee for substituting dairy milk with a non-dairy alternative, part of the mega coffee chain’s efforts to revitalize its brand, in a year where it has struggled with slumping sales and consumer boycotts.
The change goes into effect on Nov. 7 at its stores in Canada and the U.S., and it will apply to soy, oat, almond and coconut milks, the company announced Wednesday. It has already dropped the surcharge at several countries including the U.K., Germany and France.
The company said that, as a result of the change, the price of non-dairy-based drinks will decrease and be equivalent to their dairy counterparts (e.g., an oat latte and a café latte will cost the same).
Starbucks brought in former Chipotle CEO Brian Niccol earlier this year to tackle key issues afflicting the Seattle-based coffee giant, including overwhelming menus and long waits, and to bring a “community coffeehouse” feel to its locations.
Niccol replaced Laxman Narasimhan, who helmed the company for just 17 months.
‘They’re trying to correct the ship’
Also on Wednesday, the chain’s Oleato beverage — an olive oil latte that received mixed reactions from customers, some of whom complained of laxative-like effects — was removed from its menus.
“Starbucks has been under a lot of pressure recently in terms of sales,” especially as consumers stretched by inflation choose more affordable options, said Bruce Winder, a retail analyst based in Toronto.
“Companies often do this when times are really tough, when the economy is tough. They often introduce value meals, or they find ways to reduce costs to try to sharpen that price point for the consumer, to increase volume and stay relevant.”
Some competitors might follow Starbucks in dropping their non-dairy surcharges, Winder said. But he said that the cost reduction is only one piece of the larger problems plaguing the company.
“This is just an example of them showcasing one thing they’re doing that shows that they’re more price-sensitive and that they’re trying to correct the ship.”
Earlier this year, three customers in the U.S. launched a class-action lawsuit against the company, saying the dairy-alternative surcharges violated the civil rights of customers who are lactose intolerant or have dairy allergies.
A Canadian law firm also launched an investigation into the company for a similar nationwide class action.
