Coffee bean prices fell 33% a year, why Starbucks latte only rose not fall? Starbucks Price Increase

As commodity prices collapse, it seems that only gasoline reflects the trend of international oil prices. Drivers really save their wallets, but why do other prices not fall, while some prices go up?

Office workers get a latte every day, whether it's Starbucks or 7-11, or in general, the price of 7-11 coffee has only gone up. In the past two years, 7-11 coffee has risen by NT $5, or 12%. In general, a cup of NT $60 latte in a self-owned shop has risen to NT $70, an increase of 16%. But in fact, the price of international coffee beans has now plummeted to its lowest level in two years, with a pound of Arabica coffee beans falling 33% to $1.11 from $1.65 a year ago.

Brazilian officials predict that this year will be a bumper harvest of coffee beans, resulting in a glut of coffee beans and a drop in prices, but don't expect lattes sold to consumers to lower prices. First of all, there is a rise in labor costs. CNN Money cited Starbucks in the United States as an example. Under the pressure of rising minimum wages in various states in the United States, Starbucks will use its profit space to raise wages, which will affect not only Starbucks, but all the retail food industry.

But many people will question that when commodity prices rise, such as the rise in coffee bean prices in 2014, Starbucks, Dunkin Donuts and many other companies have said that in response to price increases. Now the price of coffee is falling, and Starbucks in the United States also raised its price in July last year. The reason is also to reflect the cost.

In addition to the minimum wage pressure, rents are also rising in many markets, and Starbucks has to pay college tuition for 4000 employees, which will be passed on to consumers. Analysts say coffee beans account for about 20% of Starbucks' total costs. as for why retail prices have to be raised, Starbucks only said that their pricing came from a variety of factors, emphasizing that it was competitive.

Dunkin Donuts said that they provide price advice to franchisees, but the final pricing is determined by individual franchisees. According to the report, the retail price of Starbucks' superstore coffee may be reduced, but it is impossible for the store to follow suit. Starbucks will only continue to raise prices in the future, and no matter how the price is adjusted, consumers are willing to pay the bill.

The article comes from the Science and Technology News.