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Starbucks hiking prices on drinks, bagged coffee

By Candice Choi

Associated Press

LAST UPDATED: 06:53 a.m. HST, Jun 20, 2014

NEW YORK >> Starbucks 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 Corp. 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 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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control wrote:
I stopped going there a couple years ago. Prices were already too high, especially food items. The $2.75 Honolulu pastry only costs $1.60 in Dallas.
on June 20,2014 | 07:48AM
ryan02 wrote:
Starbucks also lied about the scholarship thing: http://news.yahoo.com/starbucks-contribution-scholarship-overstated-155344515--finance.html Why anybody would pay for their already over-priced drinks (which are about to go up in price) is beyond me. It's amazing how people can be so easily manipulated by "fad" and "marketing" and "lies about scholarships" and whatnot.
on June 20,2014 | 08:26AM
makiki123 wrote:
Why does anyone go to Starbucks? The prices are a ripoff and the coffee is nothing special. The coffee at McDonalds and other fast food places are better. I don't need the status symbol of carrying a Starbucks cup...but I guess many do.
on June 20,2014 | 08:28AM
GooglyMoogly wrote:
At this point, I question whether it's still considered a status symbol? I mean, it seems like there's a SB every quarter-mile or so. Some of their drinks are delicious, but fall in the "indulgence" category and not so much the "need to get my caffeine" category. :)
on June 20,2014 | 02:17PM
PinkSushi wrote:
I agree. I no longer get coffee there. I can easily afford it, but I will no longer pay $4.35 for a white chocolate mocha. I either go to 7-11 or McDonalds for coffee or brew it at my house. I think its status symbol. People want to feel proud they can drink Starbucks coffee.
on June 20,2014 | 07:08PM
lowtone123 wrote:
Starbucks is already overpriced. I can make a better tasting cup of coffee in my Keurig at home for $.50 a Grande size mug instead of $3.
on June 20,2014 | 09:10AM
South76 wrote:
Is the cost increase related to the minimum wage increase in Seattle? What a way to subsidize wage increase on its own turf by raising prices across the board--collect the money and so it can stay in business back at home in Seattle.
on June 20,2014 | 09:49AM
ellinaskyrt wrote:
Oh, please. If Starbucks is struggling in Seattle, it's because far better coffee is easily found within a stone's throw anywhere in that city. Besides, Starbucks' net income in 2013 was $481.1 million--a record for them. And Seattle's minimum wage to $15 doesn't start until 2017 at earliest. It's just gone up to $11 from $9.32.
on June 20,2014 | 10:28AM
laachang wrote:
I just knew they were gonna jack their prices to cover the cost of the online college education they offer their employees!!
on June 20,2014 | 10:55AM
ryan02 wrote:
Starbucks lied about the scholarships: http://news.yahoo.com/starbucks-contribution-scholarship-overstated-155344515--finance.html
on June 20,2014 | 12:48PM
CriticalReader wrote:
Do yourself a favor and find the closest Coffee Bean store.
on June 20,2014 | 11:01AM
saveparadise wrote:
It's the free atmosphere. For your cup of whatever you get free Wi-Fi internet while the free weird music is playing constantly. Oh, and it's air conditioned so you can escape the heat if you have none at home.
on June 20,2014 | 11:21AM
sailfish1 wrote:
FYI - Wi-Fi and air conditioning is free at the public libraries.
on June 20,2014 | 11:27AM
sailfish1 wrote:
Starbucks hot coffee is overpriced and no flavor varieties. Foodland and Times coffee is better. What is strange to me is that Starbucks coffee in Thailand is just as expensive as here in the U.S. while their workers get a much lower salary and their rents are much lower.
on June 20,2014 | 11:32AM
SandBar wrote:
As a Hawaii resident you should know about how shipping cost drives up the prices.
on June 20,2014 | 11:58AM
fiveo wrote:
Sounds like Starbucks is going to drive themselves out of business in the near future. They do have great coffee but no longer have the field to themselves and others are more competitive. But that's the way niche businesses can become. A success for awhile but then comes competition.
on June 20,2014 | 02:03PM
GooglyMoogly wrote:
Not likely. Starbucks has done a good job of convincing consumers that it's not "just a cup of coffee", but rather an experience. Sure, you can get/make any of their drinks at a hundred other places, but is it's not going to be the same thing. Everything on their menu has a Starbucks-exclusive name (a plain coffee is called "drip". their sizes are not the traditional S-M-L, you get it). All of that nonsense goes into their experience-building.
on June 20,2014 | 02:23PM
Smiling wrote:
BEST coffee in town is at 7-11....no kidding...their coconut is to die for.....for about $1.39 pr cup!!!
on June 20,2014 | 03:06PM
primowarrior wrote:
Starbucks had it's most profitable year in company history in 2013, at $1.7 billion in net income. I guess that wasn't enough. Water is better for you anyway.
on June 20,2014 | 07:44PM
Bdpapa wrote:
They got good coffee and good service. But, they are pushing the limit now!
on June 20,2014 | 08:57PM
HD36 wrote:
Coffee, soybeans, corn, live cattle, orange juice, oil, gold, silver, wheat, are all commodities in a global market. When there is a finite supply of goods being chased by an infinite supply of paper currencies, the result, throughout history, is that prices rise. They call it inflation. The prices aren't really going up. The value of your dollar is going down.
on June 20,2014 | 09:31PM
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