Posted by Shirley Brady on September 23, 2010 12:30 PM
Yesterday, the first day of fall, Starbucks touted the return of its pumpkin spice latte flavor with an ad called, "Who's not excited?" You know who's not excited? Starbucks customers wondering about the looming price increases for "certain beverages."
After all, it's not like the struggling coffee retailer wasn't already worrying cash-strapped coffee-lovers over fears of dispensing with its smaller (and cheaper) coffee sizes.
Blame it on the price of green coffee beans. Starbucks president and CEO Howard Schultz was quoted in yesterday's press release:
“Over the last six months a highly speculative green coffee market and dramatically increased commodity costs have completely altered the economic and financial picture of many players in the coffee industry. And while many, if not most, coffee roasters and retailers began raising prices months ago, we have thus far chosen to absorb the price increases ourselves and not pass them on to our customers. But the extreme nature of the cost increases has made it untenable for us to continue to do so and we have been forced to take the steps we announced today."
As part of the plan, Starbucks expects to maintain or lower the price of some of its most popular beverages, including certain espresso beverages; and, in most markets, its popular $1.50 tall brewed coffee; and to raise prices of labor-intensive and larger-sized beverages. The company also said that it would continue to carefully monitor and evaluate green coffee prices and the possibility of raising prices in consumer packaged goods channels in coming months. “As we navigate this challenging cost environment, we will continue to offer value options for our customers every day through our My Starbucks Rewards loyalty program and other promotions,” added Schultz.
It's not the only chain to raise prices in the fourth quarter due to increasing commodity costs; as TheStreet.com notes, the Wendy's Arby's Group is raising some menu item prices for similar reasons.