Starbucks rises the price of coffee beverages to maintain the profits

Starbucks rises the price

The world’s top leading coffee company Starbucks has raised the prices of some of its beverages to cover the lifting costs including wages, rents and promotions.

Even after the prices of raw coffee have been falling, as about 42 percent of the decline in Arabica prices from the top of last year this Seattle company has increased the cost of the average customer order by about 1 percent. The price hike has effected all the small and large brewed coffee rising the prices by 10 cents throughout the world’s Starbucks outlets.

Spokeswomen of Starbucks said

 the income comes from an overall need to manage business cost, including labour and rent expenses.

Also,Starbucks in an interview said the change in cost is a result of the consent evolution of business finances at the end, they are attempting to balance between the value of the product to the costumers as well as to run a profitable business.

Starbucks said that for most beverages that are increasing, prices will go up by 5 to 20 cents. The types of drinks concerned will be altered by the market, but in most stores, prices will increase for tall, or 12-ounce, or 20-ounce, brewed coffee, or 16-ounce, latte. That stands for the first price rise on these items in two years.

A large sized brewed coffee will cost $2.45 after the increase, for example. In most stores there will be no change to the more popular drinks and sizes.

Starbucks feels that the price hike will be barely noticeable considering the coffee enthusiasts can already afford the lofty prices and the increased prices won’t have much of a dent on customer visits.

The rise in coffee prices is not just which has impacted, some of it is also being felt in the food and milk. Due to such rises the company get no option other than the rising prices as long as consumers are comfortable in buying their products.

You can view more about the reasons of this price hike on CBS News Report here.

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According to Starbucks CEO- Howard Schultz, two months’ back the company was not planing to raise the prices of its menu despite the rise in commodity costs. But now when the competitors have increased the price, the customers are already aware of the reason making them no choice to neglect their daily coffee at Starbucks even if the price rises more.

A representative for Starbucks, Lisa Passe, said “prices are not being raised on any food items.”

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