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Starbucks hikes prices on popular coffee drinks

By Amy R. Connolly
Coffee giant Starbucks is raising its prices between 5 and 20 cents for some of its drinks as prices for raw coffee continue to decline. File Photo by Billie Jean Shaw/UPI
Coffee giant Starbucks is raising its prices between 5 and 20 cents for some of its drinks as prices for raw coffee continue to decline. File Photo by Billie Jean Shaw/UPI

SEATTLE, July 7 (UPI) -- Coffee giant Starbucks is raising its prices on Tuesday between 5 and 20 cents for some of its popular coffee drinks as prices for raw coffee continue to decline.

The company said the price hike is intended to cover rising costs that include wages and rents despite a decline of about 42 percent in Arabica futures from the peak late last year. The increase, which takes effect Tuesday, will increase the cost of the average order by about one percent, Starbucks said.

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The company did not specify which drinks would be impacted but indicated the price hike would hit most hot beverages. The cost of bagged coffee and food won't be affected.

For the past three years, the company has increased prices on different products, but this is the first increase in two years "for the majority of impacted beverages, such as tall brewed coffee (12-ounce) and grande (16-ounce) latte," Starbucks spokeswoman Lisa Passe said.

The higher prices come as Starbucks marked an 18 percent boost in company profits last quarter. The company reported $4.6 billion in net earnings even with higher operating costs that include increasing wages and benefits.

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"Our pricing philosophy is to balance our need to run our business effectively while providing maximum value to our customers," a company spokeswoman said.

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