At a time when the prospect of global coffee shortage is looming large, caffeine-related effects have started being felt. Starbucks Corp. is mulling over raising the prices for certain packaged coffee and other products.
With the development, Starbucks has joined the club of other big java makers who has made similar decision of rate hike in response to a jump in raw coffee costs earlier this year that is now making its way to consumer wallets.
Some beverages in Starbucks SBUX -0.82% U.S. company-operated stores will cost you more from Tuesday. The products will be increased by between five cents and 20 cents. For instance, a 20-ounce i.e. venti-sized cup of brewed coffee will cost USD 2.35, an increase of either 10 cents or 15 cents, depending on the market.
“Price increases on the beverages in its stores will boost the average ticket by less than 1%”, Starbucks said.
The list prices of packaged coffee will increase by an average of 8% on July 21. It means, it will be an increase of around $1 a bag, so a 12-ounce bag of coffee would go to $9.99 from $8.99.
According to Starbucks, it has locked in all of its coffee needs for fiscal year 2014, and 40% of its coffee needs for fiscal 2015.
“For both our packaged coffee and retail business, there are many factors that contribute to our pricing decisions, including competitive dynamics and our overall cost structure,” a Starbucks spokeswoman said.
Starbucks had last hiked the prices in its cafes in June 2013 by an average of 1%.
According to the reports, the hike may not affect Americans largely as many of them have already adjusted their habits by switching to drinking less cups of straight joe and more espresso-based drinks.
A report by Reuters has found the number of US adults who enjoy a daily cup of coffee has dropped to 61 percent in 2014 from last year’s 63 percent.