Cheaper Coffee? Not at Starbucks

by Nate Wooley | November 9, 2012 10:52 am

Cheaper Coffee? Not at Starbucks

Coffee 300x240 Cheaper Coffee? Not at Starbucks[1]People 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[2]) is counting on, anyway. The price retailers pay for wholesale coffee has declined approximately 30% from this time last year[3], 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[4]), which sells packaged Folgers and Dunkin Donuts (NASDAQ:DNKN[5]) 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.

More from the coffee world:

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2011/10/Coffee.jpg
  2. SBUX: http://studio-5.financialcontent.com/investplace/quote?Symbol=SBUX
  3. has declined approximately 30% from this time last year: http://www.marketwatch.com/story/coffee-prices-fall-but-not-at-starbucks-2012-11-08
  4. SJM: http://studio-5.financialcontent.com/investplace/quote?Symbol=SJM
  5. DNKN: http://studio-5.financialcontent.com/investplace/quote?Symbol=DNKN
  6. Green Mountain to Make K-Cups for CostCo: http://investorplace.com/2012/11/green-mountain-to-make-k-cups-for-costco/
  7. Starbucks Tells Taxman, Investors Different Stories: http://investorplace.com/2012/11/starbucks-tells-taxman-investors-two-different-stories/
  8. Battle of Home Espresso Machines Is Brewing: http://investorplace.com/2012/11/battle-of-home-espresso-machines-is-brewing/

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