USA – Starbucks Corp has raised prices for brewed coffee by an average of 1 to 2% in the past year and according to the company, it was in line with industry practices, reported ET Retail.
Some of the products affected included a regular drip coffee whose price rose by 10 cents to 20 cents in most US stores.
Though the increase may be higher for particular drinks, Starbucks said prices for drinks such as lattes and iced coffees in most stores were not changed.
The company has been rolling out specialty drinks which cost more over the years but it recently announced it was cutting the number of special drink options by 30%.
Starbuck’s chief operating officer Rosalind Brewer said slashing the amount of speciality drinks produced will allow Starbucks to focus more on other drinks like cold brews and teas, and to work on bringing their extended food menu to more stores.
In return Starbucks offered an extended menu including tasty gourmet sandwiches.
Despite of its venture into the Unicorn Frapp, a bright pink and purple Frappuccino that is both sweet and tangy together with a number of special drink options including Pumpkin Spice Lattes, the coffee chain managed only 2% increase in sales.
Analysts said the average annual price increase for a tall brewed coffee at Starbucks has been 1.7% over time, reflecting overall inflation rates, ‘meaning the price hasn’t risen in real terms’.
Speculations had it that Starbucks could lose US$12.4 million in sales following an incident at one of its stores in Philadelphia when two black men were arrested after trying to use the bathroom without ordering anything.
This prompted it to close all of its 8,000 locations across the US for the afternoon of May 29 for “racial-bias education” training.
But the company maintained the latest change was not related to the events and it has always evaluated prices.
According to the company’s latest earnings report, Starbucks-owned stores made about US$4.7 billion in revenue over the most recent quarter.