Your Starbucks coffee habit to cost more in Sunbelt, Northeast

Michael Santo's picture

If you want a cup of Starbucks coffee, and you live in certain parts of the country, you can expect a slight price increase to be coming.

Indeed, keeping your caffeine level high will be more costly in the U.S. Northeast and Sunbelt regions. For example, in New York City, prices for the 12-ounce "tall" brewed coffees and latte drinks will go up 10 cents each. Prices on about a half a dozen other beverages also will rise, Starbucks spokesman Jim Olson told Reuters.

On average, prices in affected regions will rise about 1 percent. In November, Starbucks raised prices on some drinks in California and Florida. With that, the world's largest coffee chain won't change pricing in those regions.

It's a continuing trend, and not just for Starbucks, either. Starbucks raised prices in 2010, then again in early 2011. However, the reality is that many of your favorite restaurants, eateries, breweries, and coffee shops will be charging customers more in 2012 than they did in 2011.

Starbucks said the price for a 16-ounce "grande" brewed coffee, which is Starbucks' most popular beverage size, remains the same across the United States and has not changed since January 2011. Olsen stated that, for example, the price for grande lattes is unchanged in most markets. Starbucks sizes goes from small, medium to large, with its own labels of tall, grande, and venti.

Starbucks said its pricing decisions are based on a number of factors, not just the price of coffee, which the company said has eased of late. Starbucks said that the company expects higher prices for things for other ingredients, such as milk --- and additionally, fuel cost increases, to cut into its profits this year. In addition, strong competition from other restaurant operators, including McDonald's which has made a big push with its McCafe line of products.

It's not as though its rivals are not feeling a similar pinch in their bottom line. For one, its aforementioned competitor McDonald's also raised its menu prices on a number of items in 2011.

As of mid-morning (PST) trading on Tuesday morning, Starbucks stock (SBUX) is down 6 cents or 0.13 percent, to $45.95. Earlier, Starbucks forecast that commodity costs would lower fiscal 2012 earnings by about 21 cents per share, but despite that, it has forecast net income of $1.75 to $1.82 per share this year, which would represent a rise of 20 percent year-over-year.


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