News Brief

Starbucks Raising Some In-Store Coffee Prices

Starbucks confirmed that it will raise the prices of in-store brewed-coffee beverages by an average of 1% in the Northeast and Sunbelt regions of the U.S., including New York, Boston, Washington, D.C., Atlanta, Dallas and Albuquerque, N.M.

That will increase the cost of a 12-ounce coffee by 10 cents, to $1.85, in some New York City locations.

Prices will not rise in California or Florida, reported The Wall Street Journal.

Starbucks stressed that its increases in cafe prices, which have occurred annually since the recession began, have been "far less" than those of competitors.

The company stated the reason for the latest increases: While its commodities purchasing practices normally keep its prices as low as possible, in recent times, it committed to commodities contracts that turned out to be not to its advantage, because coffee commodities prices fell.

It remains to be seen whether there is a point at which fanatical Starbucks fans will rebel over in-store pricing increases, but Starbucks execs said its high-end consumers are less sensitive to cost increases than the customers of competitors, such as QSRs.

Starbucks is not raising the prices of its packaged coffees in its own stores or grocery stores, where the company faces greater competitive pressures, according to WSJ. But in 2011, it raised packaged coffee prices by 17% in its cafes, and by 12% in grocery stores. 

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