x
Breaking News
More () »

Starbucks raises its coffee prices 10-20 cents across the U.S.

The price change only affects Starbucks' brewed coffee. Lattes, iced coffee, Frappuccinos and other drinks are unchanged at most stores.

Your morning jolt of caffeine just got a little more grande.

Starbucks has raised the price of its brewed coffee 10 cents to 20 cents at most of its company-owned stores in the U.S. The price for a 12-ounce drink, for example, is now $1.95 to $2.15.

The increase, which differs by market, went into effect on Tuesday.

But the prices of the majority of the chain's beverages, like lattes, mochas, tea lattes, iced coffee, Frappuccinos, iced tea, cold brews and Nitros, remain unchanged at nearly all locations, according to the company.

In the the past year, the coffee chain has raised prices 1% to 2 %, which "is on par with the industry practices and is in line with food-away-from-home inflation, which is 2.2% to 2.4%," spokeswoman Sanja Gould said in an e-mail.

"Evaluating prices periodically allows us to balance the need to run our business profitably, while continuing to provide value to our loyal customers and to attract new customers," she said. "This price adjustment was not related to last week’s store closures and trainings," she said.

On the afternoon of May 29, the Seattle-based chain closed its company-owned stores

John Zolidis, president of Quo Vadis Capital, said the price increase is likely to drive customers away -- and the lost business from those consumers can be offset by the higher prices.

"One of the great things about Starbucks' product is that it's habit-forming, so you've got a consumer that really needs their daily, weekly, hourly fix," he said. "Twenty cents or 10 cents, some won't even notice."

In late April, Starbucks reported second-quarter net revenues of $6 billion, up 13.9% from $5.29 billion in the same period in fiscal year 2017.

On Monday, the coffee giant's executive chairman, Howard Schultz, who's credited with transforming the brand into an international force, announced that he was stepping down, effective June 26. He'd passed along the CEO duties to Kevin Johnson in April 2017.

And on Tuesday, Starbucks launched the latest addition to its permanent menu, the Serious Strawberry Frappuccino, as it continues to move away from limited-time offer drinks.

Zolidis said he sees a thread connecting the price increase, Schultz's departure and new menu items -- as well as the company's larger focus on China and the $7 billion sale of the global rights to its packaged coffee and tea to Nestlé last month.

"The business in the U.S. is becoming more saturated and offering less growth," he said. "They need to find new ways to squeeze more out of the lemon."

Before You Leave, Check This Out