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Starbucks Canada raises coffee prices across country

By David Friend
The Canadian Press

October 4, 2011

A random sampling of locations in the Toronto area suggested 
a rough increase of about 10 to 15 cents for a grande bold coffee. 
(GREG BAKER/AP via The Canadian Press)
TORONTO—Starbucks Canada raised prices for coffee and other beverages on Tuesday at stores across the country.

The American coffee chain declined to say exactly how much it’s boosting the price for a cup of coffee, but a random sampling of locations in the Toronto area suggested a rough increase of about 10 to 15 cents for a grande bold coffee.

Other specialty coffees saw larger increases. A grande caramel macchiato rose by 88 cents to $5.03 at one location.

The Seattle-based corporation said the price increases vary by region and the size and type of drink.

Starbucks does not break out market specifics, so the company said it can’t be certain how much prices have gone up on average.

The chain said the changes come as a response to rising coffee and commodity prices.

“Starbucks carefully monitors and evaluates costs, including green coffee prices, commodity costs and competitive dynamics, and we respond with pricing adjustments that balance our need to run the business effectively while providing maximum value to our customers in Canada,” the company said in a statement.

The adjustments come as Starbucks positions itself in the highly competitive Canadian coffee market, where chains like Tim Hortons and McDonald’s are vying for a larger chunk of the market with expanded offerings of lattes and cappuccinos.

All of the chains have grappled with increased prices for commodities such as coffee and the wheat and sugar used in its baked goods.

In August, Tim Hortons chief executive Paul House said the price of coffee keeps climbing because major coffee grower Colombia has been hit by a fungus that destroys coffee plants. Also, more people in growing economies like China and India are willing to spend their money on a java jolt, which has led to dwindling world coffee stockpiles.

Starbucks said it also lowered the prices of some of its drinks, though it was unable to provide examples.

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