Tags: starbucks | raises | prices | 20 cents

Starbucks Raises Prices Yet Again in 5 to 20-Cent Hike for Some Drinks

By    |   Tuesday, 07 Jul 2015 12:49 PM

Starbucks is raising its prices for the second time in two years starting Tuesday.

Most of the hikes will be 4 to 20 cents higher than current prices. The prices of tall and venti (Starbucks-speak for "small" and "large") brewed coffees will rise 10 cents, so the cost of a venti coffee in most U.S. stores will now be $2.45.

The Seattle-based company said they adjusted prices in order to "balance the need to run our business profitably while continuing to provide value to our loyal customers and to attract new customers," The Associated Press reported.

Lisa Passe, Starbucks spokeswoman, claims the price increase will affect less than than 20 percent of Starbucks customers. However, the price increases were determined by current purchasing patterns, which are bound to change once the weather turns cold.

The price increase mainly impacts hot drinks, Passe said. That means more customers will notice the price hike when the demand for hot drinks goes up.

Still, the price increase does not impact bagged coffee and food items, as Starbucks hopes to incentivize customers to buy more food products.

The price hike comes as other coffee vendors are cutting their prices because of the declining cost of coffee beans. While the J.M. Smucker Co. says they are cutting their prices because of the lower coffee bean costs, Starbucks said the price change is meant to accommodate other expenses such as rent, labor, marketing, and equipment.

Last quarter Starbucks experienced an 18-percent boost in profits and had net earnings of $4.6 billion, despite the company's high operating costs, reported UPI.

In July 2014 Starbucks raised the price of its packaged coffee from $8.99 to $9.99 and increased the price of some less popular drinks by 5 to 20 percent, the Los Angeles Times reported.

At the time, several other coffee companies had also raised their prices as a result of a predicted drought in Brazil that could drive coffee bean prices up.

“We look at cost structure, we try to price on a long-term basis,” Zack Hutson, Starbucks spokesman in 2014, announced to the Times.

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Starbucks is raising its prices for the second time in two years starting Tuesday.
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Tuesday, 07 Jul 2015 12:49 PM
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