Starbucks To Maintain Pricing

Coffee addicts (like me) rejoice ! Starbucks has decided not to raise their prices.

Starbucks said Tuesday it will absorb additional commodity costs due to high coffee prices, and it has no plans to raise prices at its stores as top U.S. roasters have recently done.

“Currently there are no plans to increase prices at this time,” a Starbucks spokeswoman told Dow Jones Newswires.

While recent spikes in coffee futures have raised costs for Starbucks, the company said it is able to “effectively mitigate” part of the short-term fluctuations.

September coffee continues to trade near 12-and-a-half-year highs as supplies of top quality arabica beans remain scarce, leaving roasters scrambling for supplies.

Prices have shot higher due to inclement weather that cut Colombia's production to 30-year lows last year and also crimped supplies in Central America. Supplies are expected to be replenished with larger crops this year, but the harvests won't begin until October.

While Starbucks says it sources the highest quality coffee from around the world, the company's growth into the largest coffee retailer has forced it to make some changes.

“They sell so much coffee now that they have had to relax those [quality standards] a bit over the years. Quality has gone down a little bit due to volume considerations,” said Jack Scoville, analyst and vice president at Price Futures Group in Chicago.

Starbucks counters that it buys the top 3 percent of the world's coffee supply and is committed to its Coffee and Farmer Equity Practices, that focuses on quality, transparency, social responsibility and environmental stewardship.

“We are committed to our program regardless of whether coffee prices are high or low,” the spokeswoman said.