The Rising Cost Of Starbucks

Ahhh, summer.  The time of year for sun, fun, sand and more expensive beverages from Starbucks.

Reportedly, you can blame it on the beans.

As of yesterday, the price of a variety of items went up by as much as 30 cents as Starbucks claims it is trying to offset the rise cost of coffee worldwide. And the rising costs of labor – Starbucks is planning on giving its employees a raise.

The summer price pick-up is being called a “a small price adjustment” with some increases in the 10-20 cent range on brewed beverages – while lattes and the various “fancy” Starbucks drinks will see a 10 to 30 cent spike.

All in, Starbucks estimates its customers will increase their total spending by about 1 percent – and that the prices on 65 percent of its beverages remain unchanged. 

“Pricing is continually evaluated on a product-by-product and market-by-market basis in our stores in order to balance business needs while continuing to provide value to our loyal customers,” Starbucks said in a statement. 

 The increase accompanies the announcement that Starbucks employees and managers are getting a 5 percent to 15 percent pay raise this fall – a move to attract staff that comes as coffee demand worldwide is spiking and pushing bean prices up. The price for arabica-coffee futures was up 20 percent in June – the largest monthly gain since 2014. 

The rollout of the price increase was probably not as smooth as Starbucks was hoping for – many of their locations accidentally began charging customers higher prices prematurely, forcing the announcement.

So far, raised prices have had minimal effects on sales – Starbucks sales have risen consistently quarter-by-quarter.