Starbucks To Increase Coffee Prices By 5 To 20 Cents From Tuesday
Starbucks is increasing the costs of its beverages at a majority of its stores across the country starting Tuesday. Customers will have to pay 5 to 20 cents more, especially for hot beverages.
However, since drinks in different regions are priced differently, Starbucks couldn’t say which ones will be charged more.
While the coffee company has inflated the prices of its products over the last three years, spokesperson Lisa Passe said that it is the first time in two years that an increase has been seen “for the majority of impacted beverages, such as Tall brewed coffee and Grande Latte,” as reported by CNN.
The price of a large coffee across majority of the stores could be raised to $2.45, Starbucks says. But the stores in Greater Seattle area will be affected by an increase of 3.5 percent; this will include almost 300 stores in King, Pierce and Snohomish counties.
The 3.5 increase is more than the overall consumer prices for the area, which saw an escalation of 0.4 percent from last year, as suggested by the Bureau of Labor Statistics. It also almost comes at par with the 12-month local increase in private employees’ average earnings per hour as of May, which is 3.57 percent.
According to The Seattle Times, the price of brewed coffee will go up by 10 cents, which is a 5-percent hike for a tall drip coffee. A tall latte, on the other hand, will cost 30 cents – an almost 10-percent increase.
Chris Mefford, CEO of Community Attributes, a data and economic analysis consultancy in Seattle, said, “It reflects confidence in this market as being able to spend more of its disposable income in a small luxury item.” He further said that “confidence in the region’s economy is as high as it gets.”
Starbucks’ net earnings of $4.6 billion in spite of higher operating expenses can be attributed to the increase in benefits and wages it offers to its employees. Part-time workers are offered health care by the company. A tuition reimbursement plan was announced by Starbucks last June (in association with the Arizona State University online studies program), under which employees could receive up to $30,000 in tuition fees for undergraduate courses.
The decision to up the prices of some of its beverages also comes at the heels of the customer satisfaction ratings released by the American Consumer Satisfaction Index (ACSI) on June 30, according to which Dunkin’ Donuts ranked higher than Starbucks.
As reported by USA Today, Starbucks Corp. said in a statement that the pricing of its products is regularly assessed to “balance the need to run our business profitably while continuing to provide value to our loyal customers and to attract new customers.”
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