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Starbucks' price rise is due to competition from coffee chains.

Published: 2025-12-26 Author: World Gafei

Last Updated: 2025/12/26, For a long time, Starbucks' marketing strategy has been very successful, attracting thousands of customers and giving its stock a steady return. But this summer, Starbucks said its costs had risen, and the price of most of its coffee products would rise by 5-20 cents. The price volatility in the global coffee market is staggering. Arabica coffee beans are a substitute for high-quality coffee

For a long time, Starbucks' marketing strategy has been very successful, attracting thousands of customers and giving its stock a steady return. But this summer, Starbucks said its costs had risen, and the price of most of its coffee products would rise by 5-20 cents.

The price volatility in the global coffee market is staggering. The futures price of Arabica beans, which represents premium coffee, peaked in October last year and fell 44% by July 6, the day Starbucks announced the price increase. As a result, many companies have responded by cutting prices.

While the price of coffee beans has fallen in the global futures market, it is shocking that most of Starbucks' retail coffee prices are rising against the market. Coffee is getting cheaper and cheaper. Why should I spend more money on coffee at Starbucks?

Starbucks spokeswoman Lisa? Starbucks is trying to "strike a balance between providing value to loyal customers and attracting new customers while making a profit," Percy said in a statement. Starbucks is not a place to drink cheap coffee. It sells experiences, not goods.

Starbucks experienced a period of rapid and efficient growth, which was able to expand while balancing its income and expenditure. In a conference call with investors on July 23, Starbucks executives revealed that the company had settled the price for 80% of its coffee supply next year.

Hamish, a commodity economist at Capital Economics in London. Companies like Starbucks "can't afford a coffee supply emergency or a sudden higher-than-expected price increase," Smith said in an interview.

As can be seen from Starbucks' financial statements, it tries not to jump into the quagmire of currency or product volatility through some hedging or pre-purchase.

Starbucks' operating costs fell in the last fiscal year that ended September 28 last year, due to lower commodity costs, mainly coffee, according to the company's annual report.

But when coffee prices fall as unexpectedly as this year, these early strategies will have some short-term negative effects: it is likely that Starbucks will pay a higher price for coffee reserves than the spot market price. this will also have an impact on later financial statements. This is one of the reasons why Starbucks is not at the same time as the big market.

Another reason is that coffee accounts for less than 1% of Starbucks' overall costs, said Olson, a company spokesman. Starbucks also has to take into account rent, labor and a large number of employee benefits, equipment, distribution and marketing, he said.

Maybe there's another reason. Howard, CEO of Starbucks? "in US stores, 20 per cent of in-store transactions are done through mobile payments, twice as much as two years ago," Schultz told investigators during a conference call last month. Consumers use mobile phone APP to pay, it's easy to transfer money, but they don't pay attention to how much money is spent.

Huang Huajun, president of the first Business Network, analyzed that Starbucks' price increase, which plays the brand of culture and taste in China, is due to insufficient competition from the coffee chain, and other coffee and catering brands do not pose a threat to it.