Cheaper Coffee? Not at Starbucks

Lower wholesale prices haven't tranlated to the chain's counters


Coffee stocksPeople will pay for their morning cup of coffee, even if it means paying a premium. That morning jolt is too important to let anything silly like price get in the way.

That’s what Starbucks (NASDAQ:SBUX) is counting on, anyway. The price retailers pay for wholesale coffee has declined approximately 30% from this time last year, as MarketWatch reports. But if you’re buying at a Starbucks, you aren’t seeing that savings. Earlier this year, the java chain raised the price of its drinks by 1%. With a 17% price hike in 2011, bagged coffee from Starbucks is even worse.

Not all retailers are charging a premium, though. J.M. Smucker (NYSE:SJM), which sells packaged Folgers and Dunkin Donuts (NASDAQ:DNKN) coffee, lowered prices in May. Of course, that followed a 23% rise in 2011.

A spokesman for Starbucks declined to comment for MarketWatch on whether the lower wholesale price would be passed along to customers.

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