Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Starbucks prices get frothier

By Ben Rooney, staff writer


NEW YORK (CNNMoney.com) -- Starbucks is raising prices on certain drinks by as much as 35 cents in large U.S. markets and in Canada as part of what the coffee chain calls its "normal course of business."

The price hikes, which rolled out Tuesday, apply to "some of our larger and more complex beverages," a Starbucks spokesperson said Friday.

At one location in New York, prices went up by 20 cents, with local customers paying more than $4 for a tall mocha latte. Prices have also gone up in California, Washington, D.C., and other large U.S. markets.

But Starbucks was quick to point out that prices have also gone down on some of the company's most popular drinks and sizes, including tall brewed coffees and tall iced teas.

"As part of a normal course of business, we continually evaluate the best way to provide value to our customers while also weighing the needs of our business," Starbucks said.

Still, the price hikes did not sit well with at least one customer, who voiced displeasure on the social networking site Twitter.

"Way to increase prices in NYC by 20% @starbucks - really??? No wonder the store was empty this morning..." user @sethburr tweeted early Friday.

The move could be a risky one for Starbucks, which has suffered declining sales for two years as consumers switched to lower priced brands like McDonald's (MCD, Fortune 500) and Dunkin Donuts.

Indeed, the price hike may have already cost Starbucks the business of one other Twitter user. "My latte was more expensive this morning - Starbucks raised their prices - might have to kick the habit," user@crivingtonhowie tweeted Friday.

But store traffic has been picking up recently, Starbucks said in its most recent quarterly report. The company now expects "modestly positive" same-store sales in 2010.

When asked if the company is concerned that the price hikes could impact sales, a Starbucks spokesperson said: "I wouldn't characterize it that way."

The company has raised prices before with limited backlash. In September, prices went up by 5 cents, or about 2%. That was the first time the company hiked prices in two years.  To top of page

Index Last Change % Change
Dow 18,432.24 -24.11 -0.13%
Nasdaq 5,162.13 7.15 0.14%
S&P 500 2,173.60 3.54 0.16%
Treasuries 1.46 -0.05 -3.51%
Data as of 9:49am ET
Company Price Change % Change
KeyCorp 11.70 0.05 0.43%
Bank of America Corp... 14.49 -0.19 -1.29%
Ford Motor Co 12.66 -0.05 -0.39%
General Electric Co 31.14 -0.11 -0.35%
Chesapeake Energy Co... 5.42 0.23 4.43%
Data as of Jul 29
Sponsors

Sections

For the first time ever, Amazon and Facebook are more valuable than Berkshire Hathaway, the storied company run by legendary investor Warren Buffett. More

Venezuela's government issues a decree recently that makes it possible to force workers to work in the country's fields amid food shortages. More

Sheryl Sandberg says she supports Hillary Clinton for president, because she would help close the gender gap, and because she's 'the most qualified candidate.' More

It's about to get harder for some luxury all-cash home buyers to hide their identity from the U.S. government. More