Starbucks Set To Raise Coffee Prices: Can You Guess Why?

Let’s dip back to this Think Progress article from February 2015

In October, Starbucks announced that it would raise its employees wages in January of this year. It promised to increase starting wages for new employees but also to give “all baristas and shift supervisors…a pay increase.”

While the announcement attracted press attention, it didn’t include details on how much employees would actually see, and the workers themselves didn’t find out until late January.

All in all, the raise supposedly didn’t amount to much, roughly 2.5% for those who had been there, and a 13% increase for new hire pay. Hey, when the pay is low to start with (to pour coffee, mind you), it doesn’t add up to much to start with. But, increase costs, and something must change

(NJ.com)  The cost of some Starbucks coffee drinks will increase by 10 to 20 cents starting Tuesday in response to rising operational costs, according to the Wall Street Journal.

Starbucks’ bagged coffee prices are also set to go up by $1 — from $8.99 to $9.99 — later this month, according to the L.A. Times.

Company representatives have said the rising costs are needed to offset increases in wages and rent.

Cause. Effect.

And, no, the cost of beans from Hotcoldwetdry hasn’t happened.

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18 Responses to “Starbucks Set To Raise Coffee Prices: Can You Guess Why?”

  1. john says:

    I think most people will not even notice that cost increase.10 or 20 cents on a drink that might cost 5 dollars?

  2. gitarcarver says:

    Of course, this is john’s typical excuse or rational: “it’s only a few pennies or a few dollars…..”

    Poor john doesn’t realize that it all adds up.

    What’s the ol’ saying?

    “A million here and a million there and pretty soon you are talking about some real money?”

    It’s the same thing with small increases in taxes, fees, costs, etc.

    But people like john think it doesn’t matter.

  3. Liam Thomas says:

    John is absolutely right…..Let Starbucks raise their prices to 10-15 dollars per coffee and pay their workers a 100k per year.

    If people are willing to tolerate the insanely stupid prices for a cup of coffee then they have an awesome business model and it is capitalism at its finest.

    What blows my mind is how the AGW left loves starbucks when they are polluting the atmosphere with co2 by the tonnes daily.

  4. JGlanton says:

    I have gotten several very appreciative friends off of their habit of buying bags of beans from Starbucks. Simply by turning them on to good coffee, something alien to the buyers of factory-produced cheap beans with the flavor roasted out of them that Starbucks peddles as gourmet shit.

  5. Dana says:

    Sitarcarver erred:

    What’s the ol’ saying?

    “A million here and a million there and pretty soon you are talking about some real money?”

    That was Senator Everett Dirksen (R-IL), many years ago, and he had it as billions, not millions.

    But Mr Carver was right about, “Poor john doesn’t realize that it all adds up.” The money that is spent at Starbucks becomes money that can’t be spent elsewhere: the Starbucks customer will either have to spend less elsewhere, or put less away in savings.

    P’raps the left believe that Starbucks’ action will nudge other people’s wages higher, and I suppose that that could happen. However, as wages get nudged higher, prices get nudged higher, so there’s really very little or no net gain in real wealth; the numbers go higher, but people become no wealthier.

    Except the top 1%: they see real increases, because they have invested well, have invested better and wiser than the 99%.

    And some people, of course, get poorer: the retirees dependent upon their savings see the real value of their savings decline.

  6. gitarcarver says:

    I always heard it locally as millions because although Dirksen was credited with saying it, he never did.

    Although often quoted, it seems Dirksen never actually said this. The Dirksen Congressional Research Center made an extensive search when fully 25% of enquiries to them were about the quotation. They could find Dirksen did say “a billion here, a billion there”, and things close to that, but not the “pretty soon you’re talking real money” part. They had one gentleman report to them he had asked Dirksen about it on an airflight and received the reply: “Oh, I never said that. A newspaper fella misquoted me once, and I thought it sounded so good that I never bothered to deny it.”

    So with knowing that, it was always changed here locally to be “millions.”

    But the point remains the same. For example, in my little burg, there was a vote for an increase in the sales tax to “help fund schools.” (That plan has already gone to crap, but that is a story for another day.” It was sold to people as “it is only a small amount.”

    Then the local governments, instead of using roll back rates on taxes, increased the millage rates. After all, it is “only a small increase.” Yet with property values coming back, people are out much more than just the “small increase.” The local government then decided to increase the utility taxes to the max. After all, according to them, it was only a “few buck as month.”

    In the end, the average person will have an increase of over $2,000 in taxes and fees this year. Very few people are getting that amount in raises, but when the government can take money,it doesn’t matter.

    All the little fees, increases, prices hikes, etc add up.

    Since john doesn’t appear to understand basic math, it is not surprising that he doesn’t understand that.

  7. […] LA Times reported that the cost of bagged coffee is going up from $8.99 to $9.99 later this month. Starbucks announced earlier this year that it was raising wages for all employees, so the cost has to be passed along to someone. I guess company executives figured their customer […]

  8. Dana says:

    Zithercarver wrote:

    Then the local governments, instead of using roll back rates on taxes, increased the millage rates. After all, it is “only a small increase.” Yet with property values coming back, people are out much more than just the “small increase.” The local government then decided to increase the utility taxes to the max. After all, according to them, it was only a “few buck as month.”

    In the end, the average person will have an increase of over $2,000 in taxes and fees this year. Very few people are getting that amount in raises, but when the government can take money,it doesn’t matter.

    This is why I am so opposed to public sector unions. Unions in the private sector have to, in the end, be partners with the companies at which the workers are employed; if they demand so much that the company cannot stay in business, then it doesn’t matter how much the workers’ wages are; they wind up with zero hours and zero dollars.

    But in the pubic sector, the “companies” can’t go out of business, can’t lose customers, because their customers have their money taken from them in taxes, backed by the police power of the state; there is no natural inhibition which prevents excessive demands, not any particular reason for the government to show some backbone in resisting union demands. Why should teachers demand tax increases to pay for increases in salaries which are already higher than what most of the people in the school district earn?

  9. Liam Thomas says:

    What blows my mind is how the AGW left loves starbucks when they are polluting the atmosphere with co2 by the tonnes daily.

    All one has to do is look at the process actually involved in the making of coffee….so much co2 ejected into the air….the massive amounts of raw materials needed to build starbucks buildings.

    The insanely amount of automobiles that are used by workers to get to starbucks to peddle their coffees.

    There is a line in the movie Divergent where they are talking about the Abnegation faction.

    “I’m surprised Abnegation eats at all….too selfish right?” paraphrasing here.

    In other words….Apple talks about being FF’ing Green Friendly and believing in AGw and yet they are destroying the planet and polluting it massively with co2 as they produce their computers, Iphones and I devices. Starbucks a big AGW company pollutes the atmosphere with their huge co2 footprint…..

    but…….as long as you say…hey we agree with the AGW movement and support it…….by god let the AGW truthers buy their Co2 polluting products….because after all…….

    We know its alway do as I say…not as I do with the AGW truthers.

  10. Deserttrek says:

    their sh*t is overpriced and not that good …. pouring coffee is like flipping burgers, not a career or a skilled trade

  11. Dana says:

    One would think that most Starbuck’s customers have to:

    1 – Drive at least somewhat out of their way to get to Starbuck’s;
    2 – Pull into the parking lot, and turn off their automobile engines;
    3 – After buying their drink, start their automobile engines;
    4 – Maneuver their way out of the parking lot; and
    5 – Drive on to work, on a course which is longer than driving straight from home to work.

    In other words, Starbuck’s increases greenhouse gas emissions! The left should ban Starbuck’s!

  12. John says:

    perfectionism in others in one of the tell tale signs of narcissism
    Expecting others to live perfect lives in order to negate their message is a weak argument. Many people ARE trying, not lead lead a perfect carbon neutral life. but to REDUCE their carbon pollution footprint.
    Do as I say not as I do ? Liam do I try to reduce my carbon pollution.
    HMMM that sure does seem like a lot there GC any chance of allowing me to FACT CHECK that in your town the average person now pays 2000$ more in taxes? And GC if you don’t like living there buy a map and MOVE Sounds like you are being priced out. That happens. It is part of CAPITALISM and the free market and democracy Yes there are downsides to all of them

    If you all think that Starbucks has made a serious business error than short their stock
    Starbucks share price has gone up 170 times its 1992 price. They seem to have a pretty good track record. YOU may think the 10-20 cents is going to hurt their profits I do not

  13. John says:

    Starbucks is at or near a record high stock price

  14. Liam Thomas says:

    Starbucks is at or near a record high stock price

    John Interest rates on long term cds are between .25 percent and 1.95 percent.

    Savings accounts typically pay around.005-.010 percent……If you failed math that is 5/100th’s of ONE percent.

    Why? Because the feds rate to borrow money is almost zero. Why is interest rates so low? So that companies and banks are willing to lend money at low rates to stimulate investment.

    In short there is NO PLACE TO PUT YOUR MONEY EXCEPT THE STOCK MARKET. Liberals like to point to Obamas wonderful economy by saying look at the stock market….its doing awesome.

    The reason its doing awesome is there is NO PLACE TO SAVE EXCEPT THE STOCK MARKET. Dividend paying stocks pay between 1.5 percent all the way up to safely 5.5 percent. So right now every stock is nearing all time highs because everyone is pouring their money into the stock market rather then your local savings and loans, banks, credit unions where the money could be better put to good use.

    If…..IF people are not saving but rather investing in the stock market then banks and savings institutions have to find other ways now in order to meet Dodd/Frank regulations of having XXXX dollars on hand to meet some arbitrary stress test so that they remain solvent in a crisis.

    This is exactly why the big banks are NOT LENDING…….NO ONES saving in big banks. Americans are putting their money in record numbers into the stock market chasing dividends. Starbucks is a dividend paying stock….Its why Apple was forced last year to begin paying dividends by its investors…..people are chasing dividends right now but unfortunately they have their lifes savings in an over bought stock market and as soon as the FED starts raising interest rates the stock market will come back to reality…….and so will Starbucks and just about every other stock in the market.

  15. Dana says:

    John wrote:

    Expecting others to live perfect lives in order to negate their message is a weak argument. Many of the little people ARE trying, not lead lead a perfect carbon neutral life. but to REDUCE their carbon pollution footprint.

    FTFY. And it’s a real fix, because the most vocal, most well known of the warmists are profligate spewers of CO2, with not even a hint of trying to cut back.

    Me, I don’t consciously try to reduce my carbon footprint at all, but I do do things like use more efficient appliances and the like, because it is economically wiser. You’ll find a lot of people like me, not giving two hoots about AGW, but still being conservative because we are conservative.

  16. Liam Thomas says:

    Starbucks has a price to earnings of over 31. That is terrible. Its dividend based upon the current price is 1.18 percent. or .18cent per quarter.

    A 31 percent Price to earnings is very high. The earnings per share of stock is 1.70. So if you multiply 31×1.70 you will get the current price of the stock.

    When I invest I have a rule of thumb to never go over a price to earnings of 20. Usually I try to stay in the 5-17 range.

    The financial fundamentals of the markets were also strong. During 1928, the price-earnings ratio for 45 industrial stocks increased from approximately 12 to approximately 14. It was over 15 in 1929 for industrials and then decreased to approximately 10 by the end of 1929. While not low, these price-earnings (P/E) ratios were by no means out of line historically.

    Notice during the stock market crash the industrial average of P/E’s was about 14 to a high of 15.

    Today we have a P/E ratio in the market of ………Are you ready? AS of yesterday the P/E of the current market is only 16.12.

    Historically not high at all…..Of course then neither was the stock market in 1929 when it suddenly crashed and crashed hard.

    So the main reason why you keep your stocks below the stock markets average p/e is because in the case of hard times the hedge fund managers will pull the plug on Starbucks but keep Ford or Kraft or JnJ because they are way over priced.

    In 1929 right before the crash Public utility stocks had been driven up by an explosion of investment trust formation and investing. The trusts, to a large extent, bought stock on margin with funds loaned not by banks but by “others.” These funds were very sensitive to any market weakness.

    or the precursor to hedge funds.

    So my investment advice to anyone…if your investing in the stock market look to P/E’s that remain under the average P/E of the market because any type of massive sell off will hit the Starbucks of the market with a vengenance while leaving sound stocks with relatively sound P/E’s unscathed at least initially…..or until you can sell and get your money before they go under as well.

  17. gitarcaver says:

    HMMM that sure does seem like a lot there GC any chance of allowing me to FACT CHECK that in your town the average person now pays 2000$ more in taxes? And GC if you don’t like living there buy a map and MOVE Sounds like you are being priced out. That happens. It is part of CAPITALISM and the free market and democracy Yes there are downsides to all of them

    Once again john, you show a tremendous amount of ignorance.

    How is the government taking more money from people part of capitalism? Capitalism is an economic system where the government lets markets work and the government basically stays out of the way.

    I would ask if you want to rethink your statement, but we both know that you won’t.

    You believe that any increase in taxes or services is fine as long as it is spread out is fine. You are like the frog sitting in the water while the heat is turned up slowly and the frog ends up being boiled.

    You want to control the lives of other people john. You hate the very idea of freedoms and self reliance.

    Not only that, you have shown a propensity to not know basic math, to misread your own citations, and to try to use “facts” that are contrary to reality.

  18. K. Ingersoll says:

    I don’t know why every news article I see on Starbucks states prices went up between 5 and 20 once. I drink a Venti Americano, it went up from 3.21 including tax to 3.54 33cents! It’s 4 shots of coffee, no cream, milk, sweetener or whip cream. I think this is outrageous all in one hit- over 10%.
    I let Starbuck know and also requested a list of there price increases on all drinks as the baristas had no idea how much they went up. I got an absolutely terrible response stating they don’t even have a data base to tell me how much each drink went up-really? They said the news media most likely made up the 5 to 20 cent increase number on their own? Wow, that’s all I can say- is this true?
    I think this is very deceptive on Starbucks part. I can’t find one online article that states any drinks would be raised more than 20 cents, my local news also reported the same 5-20 cents max hike. I guess they all made up the same story? This might not be much to some but 33 cents per drink is a lot to me and I will need to look elsewhere for my coffee in the future.
    I think the public has a right to know some drinks have gone up much more than the 20cent “max” Guess Starbucks didn’t want to look bad and took it’s customers for stupid.
    Any info you have on this I’d appreciate.

    thanks,
    Kim

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