Starbucks will be raising prices on certain beverages in the U.S. Northeast, South and Southwest. The price for a tall coffee will go up 10 cents in those regions, but beverages that are grande, the next size up, won’t change in prices.
Starbucks (NASDAQ:SBUX) spokesman Jim Olson says about the coffee company, “The prices reflect competition in certain markets and higher costs for coffee, fuel, and other commodities.”
The Associated Press reported, “The Seattle coffee chain is raising prices about 1 percent in the Northeast and Sunbelt regions. Starbucks won’t disclose all of the states its raising prices, but the regions include New York, Washington, D.C., and most Southern states excluding California and Florida.”
Other cities where it will raise prices at their coffee shops include Boston, Atlanta, Dallas and Albuquerque, N.M.
Starbucks raised prices on some menu items in California and South Florida in November, so they will not be affected by this current price increase.
“Starbucks expects high prices for things like coffee, milk and fuel to cut into profits this year and along with restaurant operators ranging from Chipotle Mexican Grill (NYSE:CMG) to McDonald’s Corp (NYSE:MCD) is raising prices to help offset some of that cost pressure,” reports MSNBC.
Starbuck’s hasn’t raised prices since 2007 although the stores have adjusted prices in some market-to-market cases over the years as the price of a coffee bean has been increasing.
Starbucks shares increased by 2.2 percent to $47.04 on Tuesday following the price increase announcement, according to NASDAQ. The company forecasted a 20 percent profit growth of $1.75 to $1.82 per share this year.