Starbucks to increase prices on selected drinks, packaged coffee products

Nathan Andrada – Fourth Estate Cooperative Contributor

Seattle, WA, United States (4E) – Starbucks said on Friday that is increasing prices on Tuesday on some of its drinks, about one year after its last national beverage price hike in June 2013.

Medium and large brewed coffees sold at Starbucks cafés will increase 10 cents to 15 cents, and prices of small and large lattes and mochas will increase by 15 cents to 20 cents. In most markets, Frappuccinos and “tall” (small) coffees and food will not be affected.

The price of a 12 ounce packaged coffee sold in grocery stores will rise by $1 from $8.99 to $9.99.

Executives of the coffee company did not provide an explanation for the move, even as coffee bean prices have climbed in recent weeks. In an emailed statement, company spokesman Zack Hutson said there are many factors that contribute to their pricing decisions, such as competitive dynamics and the company’s overall cost structure.

Commodity costs may not be the major factor. Coffee commodity costs have historically accounted for 10 percent of Starbucks operating structure, according to Mr. Hutson. Starbucks has virtually has all of its coffee needs covered for fiscal year 2014, and over 40 percent of its coffee needs covered for the following fiscal year.

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