As if their prices weren't high enough, a Starbucks price increase went into effect today. Some of the beverages may be a bit higher priced.
Starting Tuesday,June 25, Starbucks raised some of its prices. The Seattle-based coffee company has decided to raise some of its prices nationall by an average of 1 percent. Not every menu item is taking a hit though, Reuters reports.
"Less than a third of beverages will be affected by the price increases," Lisa Passe, a Starbucks spokeswoman told Reuters. "In most stores, the price of a Grande or Venti brewed coffee, as well as Frappuccino and Refreshers, will remain the same." Smaller sizes will be impacted as the price of a small-brewed coffee, or a tall in Starbucks language, will increase by 10 cents and other drinks may increase by even more.
The price increased vary by region. These are the first price changes that customers will see in two years when the last increase took place. However this increase comes at a strange time as there was a recent dip in coffee cost on the market. Green arabica coffee prices dropped to a four-year-low on Thursday.
According to Mark Kalinowski, an analyst from Janney Montgomery Scott, Starbucks will likely only pay half of the $1.4 billion it did for coffee in the previous year due to the market price decrease.
However Passe says that coffee costs are just a small part of the company's expenses though. Coffee commodity costs only make up less than 10 percent of Starbucks' overall expenses. Other things like rent, labor, equipment, and other ingredients come with high prices and Passe cites these as the reason for the price hike.
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