SEATTLE -- Starbucks Corp. is raising prices on certain drinks by as much as 35 cents in large U.S. markets and in Canada as part of what the coffee chain calls its "normal course of business," according to a report by CNNMoney.com. The price hikes, which went into effect on Tuesday, apply to "some of our larger and more complex beverages," a Starbucks spokesperson told the news outlet.
At one location in New York, prices went up by 20 cents, with local customers paying more than $4 for a tall mocha latte. Prices have [image-nocss] also gone up in California, Washington, D.C., and other large U.S. markets, said the report.
But Starbucks pointed out that prices have also gone down on some of the company's most popular drinks and sizes, including tall brewed coffees and tall iced teas. (Click here for previous CSP Daily News coverage.)
"As part of a normal course of business, we continually evaluate the best way to provide value to our customers while also weighing the needs of our business," Starbucks said.
The move could be a risky one for Starbucks, which has suffered declining sales for two years as consumers switched to lower priced brands like McDonald's and Dunkin Donuts, the report said.
But store traffic has been picking up recently, Starbucks said in its most recent quarterly report. The company now expects "modestly positive" same-store sales in 2010.
When asked if the company is concerned that the price hikes could impact sales, a Starbucks spokesperson told CNNMoney: "I wouldn't characterize it that way."
The company has raised prices before with limited backlash, said the report. In September, prices went up by 5 cents, or about 2%. That was the first time the company hiked prices in two years.
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