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Starbucks announced yesterday that it is increasing its coffee prices by about one percent in the Northeast and in the Sunbelt, a move that will affect cities that include New York, Washington, Boston, Atlanta and Dallas. Prices are not slated to rise on the west coast or in Florida.

According to the Wall Street Journal, “Starbucks has raised prices in its cafes annually since the recession began, though the company said its increases have been ‘far less’ than those of its rivals.

“Starbucks will face higher commodity costs than some of its competitors in the coming months. The chain made contracts to buy coffee for the fiscal year that began in October because prices were rising and Starbucks wanted to eliminate the volatility of buying on the spot market. But the market for coffee soon fell, and Starbucks was stuck paying more than it would have otherwise.”
KC's View:
I’m already hearing some blowback on this ... with some people saying things like, “Starbucks misjudges the market and they’re going to make me pay more?”

Will this make them buy coffee at Dunkin’ donuts or Caribou Coffee or Java Joe’s or some other place? Beats me. But I wonder what the ceiling is for Starbucks’ prices.