The real reason for Starbucks' price increase

The price of coffee in some Starbucks stores in the United States has risen by 5 cents to 20 cents. In addition, the retail price of all kinds of Starbucks bagged coffee sold in Starbucks stores will rise by $1 to $9.99 from July.

Last month, JM Smuckers and Folgers also raised the price of coffee, of course, for a very high-sounding reason-soaring prices.

The first impression is that the increase in the price of coffee is just a sign of inflation, and from this point of view, the discussion will extend to the dangers of low bank interest rates, and then pass these disadvantages on to American consumers.

Although the retail price of coffee has increased a lot last year, it is still nearly 50 per cent lower than the price of 2009. In fact, the dry climate in South Africa has not had a serious impact on coffee bean cultivation since April, as we feared. In fact, the price of coffee bean raw materials has fallen by nearly 20%.

We have to take a clear look at the main reasons for the price increase. There are two main reasons:

1. Due to the purchase of raw materials and other force majeure factors, they are forced to raise prices in order to continue to operate.

two。 Without force majeure, business owners just realize that they can make more profits by simply raising prices, while consumers are willing to pay for price increases. This is market economy, which can also be called "capitalism".

The main reason for Starbucks' price increase is obviously not the first point mentioned above. We all know that only 10% of Starbucks' operating costs really come from the "cost of coffee", and the coffee sold by the company is basically "self-sufficient." In addition, the price increase is only aimed at some cup-shaped coffee, affecting customers accounting for about 20% of its total customers, so Starbucks' price increase is not due to the cost of raw materials.

At present, the competition in the single cup coffee and food market is fierce, and Starbucks has not thought of a better way to sell it, so the Seattle-based coffee giant decided to restore some of the cup-shaped retail prices to the same level as in April 2013.

Starbucks' price increase is a gamble, betting on consumers who faithfully order "oversized" coffee, believing that even if the price goes up, this group of customers will never give up on Starbucks. This is not worth publicizing, people who like to drink naturally continue to buy, can not be reconciled to choose other cheap coffee, right?

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