Why is Starbucks hiking prices again?
Starbucks聽Corp said it would raise prices for some of its coffee beverages by 5-20 cents in the聽United States beginning聽Tuesday.
Starbucks, however, will leave the prices of some popular beverages such as the Grande Brewed Coffee and the Frappuccino unchanged in most U.S. outlets, it said on Monday.
The price hike comes at a time coffee prices have cooled from highs hit last year after a drought in the world's biggest coffee producer,聽Brazil, triggered supply concerns.
Some other coffee sellers are cutting prices. Last week, The J.M. Smucker Co. said it would cut prices for most of its coffee products because of declines in future prices for unroasted coffee beans. In an emailed statement Monday,聽Starbucks聽Corp. said coffee costs are only part of its expenses, which also include rent, labor, marketing and equipment.
The statement said the company continually evaluates pricing to "balance the need to run our business profitably while continuing to provide value to our loyal customers and to attract new customers."
A representative for聽Starbucks, Lisa Passe, said the price increases are expected to impact less than 20 percent of customers. But that estimate is based on current purchasing patterns, which include more cold drinks given the warmer weather.
Arabica coffee futures on ICE fell to a one-and-a-half year low on Monday.
Starbucks聽said the price hikes would affect fewer than 20 percent of its customers and would increase the average ticket by 1 percent.
The price hike, which will be implemented "market-by-market and product-by-product," will not include food items or packaged coffee, Ms.聽Passe聽told Reuters.
Tall (12 oz) and Venti (20 oz) cups of brewed coffee - small and big in聽Starbucks' lingo - will cost 10 cents more each in most U.S. markets, the company said in an emailed statement.
For example, a Venti coffee will now cost $2.45 in most U.S. outlets.
Starbucks聽raised prices last year for most of its drinks, including the Grande Brewed Coffee, for the first time in four years.
U.S. roaster J.M. Smucker Co said last week that it would cut prices for most of its Folgers and Dunkin' Donuts coffee brands to bring back customers.聽
