Starbucks hiking prices despite falling costs

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Associated Press

Posted on June 21, 2013 at 12:01 PM

Updated Friday, Jun 21 at 12:02 PM

NEW YORK (AP) — Starbucks wants a few extra pennies for that latte.

The Seattle-based coffee company says it's hiking prices on average by 1 percent nationally starting Tuesday. But it says the price for many drinks, such as medium and large brewed coffees and Frappuccinos, won't change in most its 11,000 U.S. cafes.

Depending on the market, Starbucks Corp. notes it's the first price hike most customers will see in about two years.

The price hike comes despite falling coffee costs that have boosted the company's profits. In the last quarter, Starbucks cited lower coffee costs for a stronger operating margin, which represents the money it pockets from sales after subtracting what it pays to keep stores running.

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