Starbucks raises prices of coffee drinks

By ALLISON LINN, AP Business WriterFri Sep 22, 7:14 AM ET

Got three bucks? That and a nickel will buy you a coffee drink at Starbucks. Starbucks Corp. said Thursday that it planned to raise prices of its lattes, cappuccinos, drip coffee and other drinks by 5 cents, or an average of 1.9 percent.

The increase, which goes into effect Oct. 3 at all company-operated stores in the U.S. and Canada, will mark the first time the company has boosted drink prices in two years.

Starbucks also is increasing the price of its coffee beans by about 50 cents per pound, or an average of 3.9 percent. That's the first price increase for whole beans in nine years, spokeswoman Valerie O'Neil said.

Starbucks isn't raising prices on the prepared drinks it sells in refrigerated cases.

O'Neil said the company decided to charge more because costs, including fuel and energy, are going up.

"It's not one specific thing. It's part of our ongoing evaluation of business costs," O'Neil said.

Starbucks' pricing varies based on the market, but the 5-cent price increase will be across the board, regardless of drink or part of the country, O'Neil said.

Currently, a tall, or 12-ounce, cup of Starbucks coffee costs between $1.40 and $1.65. Twelve-ounce lattes cost between $2.40 and $3.10, depending on the market, and a tall mocha costs between $2.70 and $3.40.

Seattle-based Starbucks had 8,624 stores in the United States as of Aug. 30, about 5,500 of which are company-operated. O'Neil said Starbucks has 495 company-operated stores in Canada, but she did not have a figure for the total number of stores there.

The coffee retailer has said it expects to open as many as 30,000 stores worldwide.