Reuters recently reported that Starbucks Corporation (SBUX) has decided to raise the prices of some of its coffee beverages in several of its cafes in the U.S., starting this week.
The average coffee price is expected to increase by about 1% nationally. Reuters states that this would be the first price increase in some of the regions in close to two years. However, prices are not expected to go up in some markets like California and Florida.
The prices of some beverages like Grande or Venti brewed coffee, as well as Frappuccino and Refreshers are expected to remain the same. Reuters reported that the price of some of its coffee beverages, for example, a tall brewed coffee, will increase by as much as 10 cents.
It is ironical that the coffee prices are being increased at a time when the company’s profits are improving due to lower coffee costs. In the last reported quarter, the company said that its operating margins have improved due to strong sales leverage and lower coffee costs.
Last week, Starbucks announced that starting this week it will post calorie counts for its beverages and food items on its menus across all its stores in the U.S. This initiative will provide further nutritional transparency to Starbucks’ customers and will allow this Zacks Rank # 3 (Hold) company to reap benefits from evolving consumer needs for healthy and nutritious products.
Other Stocks to Consider
CEC Entertainment Inc. (CEC), carrying a Zacks Rank #1 (Strong Buy) and Bloomin' Brands, Inc. (BLMN) and Cracker Barrel Old Country Store, Inc. (CBRL), both carrying a Zacks Rank #2 (Buy) each, are other stocks worth considering in this space.
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