Starbucks price rise varies across US states

Starbucks increased its coffee prices by varying margins across the United States this week. The company announced that from Tuesday it would raise prices for some of its coffee drinks in the US and a small number of cities in Canada. “We continually evaluate pricing on a product-by-product and market-by-market basis in our stores in order to balance the need to run our business profitably,” a Starbucks spokesperson told GCR Magazine. Starbucks said it is expecting less than 20 per cent of its customers to be affected by the price rise, which will increase the average order by about 1 per cent. The Seattle Times reported that in 300 Starbucks stores in the Greater Seattle area, the increase would be closer to 3.5 per cent. “Inflation at Starbucks in Seattle will run highest for those who buy only brewed coffee,” reported Journalist Ángel González, in The Seattle Times. “They will pay between 10 and 20 cents more per cup — 10 cents is a 5 per cent increase for a tall drip coffee. A tall latte in this region will see a nearly 10 per cent hike of 30 cents per cup.” González reported that the significant difference between Seattle and the rest of the US reflects confidence in the region’s economy, which is driven by the recent technology boom. According to the latest figures available from the United States Bureau of Labor Statistics, the mean annual wage in Seattle is more than US$10,000 higher than the national average. “If all prices in the US were rising that fast, inflation would be comparable to the West African nation of Guinea, which last year had the world’s 10th-highest rate of inflation,” González reports. Last year Starbucks raised the prices for most of its drinks in the US for the first time in four years Starbucks said that although it could not discuss future plans due to competitive reasons, the pricing change would not affect the Australian market. “Through the My Starbucks Reward program our loyal customers will continue to enjoy great value whenever they visit our stores,” said the Starbucks spokesperson.

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