A Jolt for Your Wallet: Starbucks Hikes Drink, Coffee Prices

Starbucks Price Hike
Gene J. Puskar/AP
By CANDICE CHOI

NEW YORK -- Starbucks (SBUX) 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 are."

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 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 (SJM) recent decision to raise prices on its coffees, which include Folgers.

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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15 Comments

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LOU

Only the begining this is what happens when you rase the minimum wage and pay for there college you just pass it on to your customers like I said only the begining

June 24 2014 at 1:28 PM Report abuse rate up rate down Reply
LA is Best

Hey StarBuckies has to pay for all of those anti gun ads somehow!

June 24 2014 at 9:27 AM Report abuse rate up rate down Reply
savannahswithgod

Not tried, will not try! Does the Gov and colleges float Starbucks?

June 23 2014 at 10:07 PM Report abuse rate up rate down Reply
palovesr

I can't believe people pay the money they do for Starbucks coffee. Its lunacy, unless
its not about the coffee but the idea that those buying it can afford it and want to
impress the people around them. But, if they can afford it, they probably spend
their money in other foolish ways as well just to get rid of it.

June 23 2014 at 9:24 PM Report abuse rate up rate down Reply
yannaro

There are as many reasons to not go to Starbucks as there are uses for duct tape. And the list for both gets larger every day.

June 23 2014 at 9:14 PM Report abuse rate up rate down Reply
1 reply to yannaro's comment
savannahswithgod

Yes I'm making a submarine from duct tape, hope to float up the Washington canal and fire the duct tape nuke. Unterseeboote 23 strikes a blow!

June 23 2014 at 10:09 PM Report abuse rate up rate down Reply
tom

the news just had the Starbucks guy on, bragging about how they are going to send their employees to college. So he raised the prices on products. Doesn't affect me, too old for college, and I'll be damned if I'll pay big dollars for a cup of coffee. McD's large for $1 is good enough for me. Or I'll make a .50 cup of Keurigs at home.

June 23 2014 at 8:46 AM Report abuse +1 rate up rate down Reply
1 reply to tom's comment
BARRY AND KATHY

Tried coffee three times as a kid. Tasted like piss. Never tried it again. Tried hot chocolate. Tasted good.
Only an idiot would pay high prices for coffee.

June 23 2014 at 8:39 PM Report abuse rate up rate down Reply
wbearl

Only Liberals would have expected that Starbucks was going to absorb the cost of those on line college classes. Every cost, from wages to benefits, that a company incurs is passed along to the customers. So I hope you Libs enjoy your coffee, but please don't stop buying at Starbucks or they might have to lay off some employees,

June 23 2014 at 7:40 AM Report abuse +2 rate up rate down Reply
1 reply to wbearl's comment
topspin360

If you knew what you were talking about instead of just reading the headlines, you'd know that Starbucks is not contributing ten cents to a college fund. There's more to it than that, and i have to agree on that point, they are deceiving their employees. People that drink Starbucks coffee don't care about the price, that's for people like you, who have to account for every dime you spend.

June 23 2014 at 9:00 PM Report abuse -1 rate up rate down Reply
1 reply to topspin360's comment
wbearl

I don't know, does 31 years in Budgeting and Planning for a major corporation count? Most people like you don't know that employee over head is almost twice what their wages are. Health Insurance is the largest chunk of employee overhead (at our company it was $1200 a month per employee), Unemployment Insurance and retirement come next. Continuing education and miscellaneous comes next. It is an unbelievable balancing act to have the right number of employees to make a product and get the highest return for it. Once a company gives it's stock holders a good return on their investment, they expect nothing less. Starbuck is no different than any other company, regardless of how liberal they are, to keep stock holders requires a good dividend.

June 23 2014 at 10:11 PM Report abuse +1 rate up rate down
harryb2378

When they raise prices, some individuals curtail or stop buying these things and look at other
alternatives. An MBA will say that the lose of business will be made up by the increase in price.
The Tall coffee, while overpriced, is the best deal at Starbucks.

June 21 2014 at 1:57 PM Report abuse -1 rate up rate down Reply
Valerie

I'm proud to say that I've never bought ANYTHING sold by Starbucks --- or any other overpriced yuppie coffee seller.

June 20 2014 at 8:03 PM Report abuse +3 rate up rate down Reply
Artie

Their coffee was ALWAYS overpriced, IMO. I for one have been surprised at the success of this company. Who would think that this company's business model would work. You get people to pay ridiculous prices for mostly very strong, burnt tasting, over priced coffee served in a paper cup. Remarkable. More power to them. At least they seem like a decent company to work for.

June 20 2014 at 5:00 PM Report abuse +3 rate up rate down Reply