Food & Drink

Starbucks Says Upcoming Price Increase 'Is in No Way Related to' Tuition Program


Starbucks Says Upcoming Price Increase 'Is in No Way Related to' Tuition Program

Photograph by Elise Amendola/AP Photo

Starting next week Starbucks (SBUX) cafés will charge several cents more for certain drinks, and the price of Starbucks packaged coffee in supermarkets will go up about $1.

Company spokesman Zack Hutson said in an e-mail that “this pricing adjustment is in no way related to the education announcement we made earlier this week.”

Starbucks announced a new initiative on Sunday to help pay workers’ tuition at Arizona State University’s online program. ASU will provide scholarships for Starbucks workers in all years. Starbucks’s contribution applies only to third and fourth-year students whom the chain will reimburse for their out-of-pocket tuition costs after scholarships and other financial aid, reported the Chronicle of Higher Education.

Starbucks attributes the price increases to “competitive dynamics,” and the company’s “overall cost structure,” which includes the cost of commodities, labor, rent, and equipment. The announcement comes as a surprise as the company had previously said it has no plans to increase prices despite the rising cost of coffee beans (coffee prices are up 53 percent this year through yesterday).

The price of medium and large brewed coffees at Starbucks cafés will go up 10¢ to 15¢, and small and large lattes and mochas will cost 15¢ to 20¢ more. “Tall” (small) coffees and Frappuccinos and food won’t be affected in most markets. In the grocery aisle, prices on the company’s K-Cup pods, Via instant coffee, and Seattle’s Best coffee won’t change. Starbucks last increased prices in 2013.

Venessa-wong-190x190
Wong is an associate editor for Bloomberg Businessweek. Follow her on Twitter @venessawwong.

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