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The Honolulu Advertiser
Posted on: Tuesday, July 24, 2007

Come end of month, you’ll be paying more at Starbucks

Advertiser Staff and News Services

Hawai'i coffee drinkers will get an extra jolt with their morning cup of joe come July 31 when Starbucks Corp. raises prices for its freshly made coffees and teas by 3 percent.

The Seattle-based retailer yesterday announced it was raising prices at its company-owned stores by an average of about 9 cents.

That includes Hawai'i, where Starbucks has 68 locations. The increase follows a 5-cent hike last fall.

It is unusual for the Seattle-based coffee-shop chain, whose stock has suffered in recent months, to raise prices even once a year. The last price increase before last October came in 2004, when drinks rose an average of 11 cents.

The latest increase applies only to U.S. company-owned stores, but shops run by partners — such as grocery stores and airport vendors — often follow suit. It also only applies to to brewed coffee and other beverages that baristas make — not to drinks sold in bottles from refrigerator cases.

The company said the increase was linked to increasing costs of operations, including higher prices for dairy products and electricity.

"Our operating costs are really what's driving it," a company spokeswoman said. "We do understand the impact it has on our customers."

Starbucks also is trying to shave costs switching from whole to 2 percent milk as the standard milk used in its U.S. stores. It does not disclose how many gallons of milk it uses each year.

Reduced-fat milk costs about 10 cents less per gallon at retail, according to a study by a U.S. Department of Agriculture agency. This year, a gallon of reduced-fat milk has averaged $3.22 nationwide, compared to $3.10 last year.