Despite an 18% increase in company profits last quarter with $4.6 billion in net profits, CNN Money reported that Starbucks will be raising some of its beverage prices. The new price increase is to be implemented on Tuesday July 14, 2015.
According to a report by CNN Money, Starbucks has been raising prices on different products for at least the last three years, but the majority of the beverages that are to be affected have not had a price increase in the past two years or more.
The list of specific beverages to be affected has not been released; however, it has been said that food, packaged coffee and some drinks, such as Frappuccino and Grande Brewed Coffee, will not be affected. Some products that will be affected include Tall and Venti Brewed Coffees, which are expected to increase 10 cents in most markets. With the price increase, Starbucks orders will be approximately 1% more expensive.
Company sales were up 7% in 2014, and the company has been expanding steadily, opening 600 new stores in the U.S. and over 20,000 stores worldwide over the past year, but the price increases are reflected in customer satisfaction as the American Consumer Satisfaction Index has found Starbucks’ customers to be less satisfied than those of one of its biggest competitors, Dunkin’ Donuts, in 2014.
The price increase follows the decision to continue a spending increase on Starbucks’ employees. The chain is unconventional in that it offers benefits even to its part-time employees, wages are higher than the legal minimum and it offers a tuition reimbursement program to employees. The higher prices for Starbucks’ products allows the chain to continue to give more to its employees.