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Starbucks price hike: 10 cents more for 'tall' in New York – but not L.A.

Starbucks says rising costs for coffee and fuel mean it must increase the price for some of its 'tall' coffee cups. But the Starbucks price hike is not uniform across the country. 

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Mark Lennihan/AP/File
Customers line up at a Starbucks in New York.
  • By Mark Trumbull Staff writer

If you like to wake up and smell the Starbucks coffee, you may now be waking up to some higher prices.

The Seattle-based chain raised prices for many US consumers Tuesday, saying the price hikes reflect its own rising costs for things like coffee, fuel, and other commodities. But the price changes aren't uniform on all beverages or in all parts of the country.

Prices went up in Boston, New York, and Washington, and most Southern states, but are not changing in California or Florida.

The company described the move as price hikes of about 1 percent, but some cups of coffee are rising by 10 cents a cup. Starbucks' hasn't done an across-the-board price increase since 2007.

The price boost comes at a time when inflation is a significant worry for consumers. During the past 12 months, food prices in the US are up an average of 4.6 percent, and overall inflation in consumer prices was 3.4 percent, according to the US Bureau of Labor Statistics.

Consumers have seen prices rising over the past year on everything from fuel to health care, college tuition to clothing.

Food chains like McDonald's have been part of the trend – and something consumers easily notice.

Starbucks has prospered since the US recession ended, as consumers have returned to small luxuries like lattes. Its stock price is up more than 20 percent from where it stood early in 2007, before the recession.

But like many US businesses, it faces the challenges of a weak economy creating a drag on consumer demand, as well as and rising costs.

The price for a "tall" coffee will go up 10 cents in affected regions, and the chain will raise prices on about six other beverages. But beverages that are "grande," the next size up, won't change.

For some companies, price hikes have succeeded at boosting profits in a tough business climate. In some other cases, price hikes have backfired as consumers shop elsewhere.

Following the price news, Starbucks' share price was down slightly in afternoon trading.

The company is also seeking to grow products by expanding overseas, increasing the number of products, expanding its loyalty program, and boosting its presence in grocery stores and other retailers.
 
• Material from the Associated Press was used in this report.

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