Starbucks China cuts prices on non-coffee drinks

Starbucks China has announced a price reduction across its non-coffee beverage offerings, aiming to expand its presence in the competitive beverage market.

Starting June 10, dozens of offerings—including Frappuccinos, Iced Shaken Teas, and Tea Lattes—will see an average price reduction of about 5 yuan for the Grande size. Some items will be priced as low as 23 yuan.

The coffee chain, which operates more than 7,700 stores in China, is doubling down on its "all-day beverage" strategy. With the goal of positioning coffee as a morning staple and non-coffee drinks as an afternoon choice, Starbucks aims to capture a wider consumer base through affordability, variety, and customization options, said analysts.

Food and beverage analyst Zhu Danpeng said the shift toward lower-priced non-coffee drinks shows Starbucks is becoming "more grounded" in its local strategy.

"While price cuts on its core coffee offerings are unlikely due to their brand positioning, optimizing the pricing of non-coffee items helps meet the needs of a wider audience," he said.

Zhu said Starbucks is using differentiated pricing to attract more diverse customers, lift store revenues, and defend market share in an increasingly competitive beverage landscape.

To support the strategy, Starbucks will continue to invest in product innovation. On June 17, the company will launch three new co-branded Iced Shaken Teas in collaboration with Disney's movie Zootopia, alongside new Tea Latte flavors and a broader rollout of co-branded merchandise and gift sets designed to deepen experiential engagement.

The Frappuccino remains a summer staple and entry point for many customers. A Mayday band collaboration in May was met with a strong consumer response, while Iced Shaken Tea has logged three consecutive years of solid sales growth, according to the company.

In April, Starbucks launched its sugar-free flavored coffee products to enhance customization and provide healthier options. The innovations have been noted during the Q2 earnings call on April 29, where Brian R. Niccol, chairman and CEO of Starbucks Corp, pointed to "indicators of progress" in China, citing changes to product offerings and pricing as factors contributing to stabilizing performance.

Catherine R. Smith, chief financial officer of Starbucks Corp, added that comparable store sales in China were flat for the quarter, with positive transactions and margins, and improved customer and employee engagement scores.

Starbucks' latest move comes as domestic rival Luckin Coffee expands into the tea category with the launch of its own kale fruit and vegetable tea line. Despite coffee's faster growth rate, freshly made tea beverages still hold a larger market share in China. According to iiMedia Research, the new-style tea market is to surpass 400 billion yuan by 2028.