Starbucks to hike coffee prices in some U.S. outlets

The Seattle company, like other coffee purveyors, often raises prices for its products when coffee prices increase, but the latest move comes despite a decline of about 42% in Arabica futures prices from a peak late previous year. The 12-month high was posted in the first half of October 2014, when prices approached $2.40 a pound on fears of drought in Brazil, producer of about a third of the world’s coffee.

“Coffee commodity costs are only part of our value equation, historically comprising between eight to 10 per cent of our overall store operating and occupancy expenses”, Suppa said.

ABN Ambro believes that future costs could come fall to $1.15 a pound by the end of the calendar year. Starbucks said bagged coffee will not change in pricing, and neither will food items. Just last week, J.M. Smucker Co. said it would cut prices for most of its Folgers and Dunkin’ Donuts coffee brands sold in the U.S.by six percent.

“This price adjustment applies to our company-operated stores across the country, but prices will continue to vary on a market-by-market basis”, Starbucks spokesperson Lisa Passe said in an email. Through a partnership with Arizona State University’s online studies program, Starbucks began signing up employees to receive as much as $30,000 toward undergraduate degrees. However, it would apply to only 10 percent of beverages in Starbucks’s Canadian menu.