Posted by Chris Oberholtz, Multimedia Producer - email
In this May 31, 2014 photo, a woman holds a coffee drink outside a Starbucks in downtown Chicago. (AP Photo/Gene J. Puskar)
NEW YORK (AP) -
Starbucks is raising prices on some of its drinks by 5
cents to 20 cents starting next week, and customers can also soon
expect to pay $1 more for the packaged coffee it sells in supermarkets.
The Seattle-based chain also raised prices on some
of the drinks sold in its cafes a year ago. The latest hikes don't seem
to be driven purely by the surging bean costs that have pressured other
coffee sellers to raise prices, however, since Starbucks has said it
already locked in its coffee contracts for the rest of this fiscal year
and much of the next.
In March, CEO Howard Schultz said during an interview with Fox Business that Starbucks had no intentions of raising its prices.
"We can manage this, we have over a year's worth of
protection," Schultz said at the time. "I suspect that most of our
competitors are short, and we are in a much better position than they
In an email Friday, Starbucks spokesman Jim Olson
noted that many factors go into pricing decisions, including
"competitive dynamics" and the company's "cost structure," which he said
includes costs for a variety of ingredients, as well as materials,
labor and occupancy costs.
Starbucks Corp. said the price increases in its cafes will kick in Tuesday and vary depending on the region.
Prices for medium and large brewed coffees, which
are known as Grande and Venti, respectively, will go up between 10 cents
and 15 cents in most U.S. markets, the company said.
Certain drinks, such as tall brewed coffees and
Frappuccinos, won't see higher prices in most places, the company said.
Tall brewed coffees were among the drinks that were hit by Starbucks'
price hikes a year ago.
The $1 price boost on packaged coffees sold in
supermarkets and other retail outlets will kick in July 21, and follow
J.M. Smucker's recent decision to raise prices on its coffees, which
Starbucks noted that it cut prices in April of last year. It said the packaged coffee sold in its cafes won't be affected.
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