A Reuters report says coffee giant Starbucks has plans to raise prices in select markets, effective today.
While this increase won't affect most markets, some cities will see a higher price if they want to get a coffee fix.
According to Reuters (via MSNBC) a price increase that is, on average, about one percent will be initiated in the U.S. Northeast and Sunbelt regions.
This price hike will affect major markets such as New York, Boston, Washington DC, Atlanta, Albuquerque and Dallas. Some cities, for instance, New York, will see 12-ounce "tall" coffees and latte drinks go up by 10 cents, and "half a dozen other beverages also will increase."
Most markets, however, won't see this increase according to the report. This includes the markets that already saw an increase in November 2011. Starbucks strategy appears to align with market-by-market price hikes in increments rather than an across-the-board increase on their menus.
The increase is being initiated to offset the heightened costs of other commodities such as coffee, milk and fuel which eat into a company's profitability.
Starbucks spokesperson Jim Olson told Reuters, "These adjustments are the result of balancing the cost of doing business with competitive dynamics in these markets."
CNBC reported milk was a high priced commodity in 2011.
“Nobody ever really talks about milk, but that was the biggest priced commodity of the year,” noted Michael Gurka, managing director of Spectrum Asset Management , during an appearance on CNBC last week.
Starbucks is not alone in raising prices, McDonald's did so last spring, and Chipotle soon followed with an announcement the company was increasing their menu prices.
Last month, Starbucks continued its expansion into overseas markets. A Dec. 8, 2011 press release announced the company's intention to add new stores in five new Chinese cities.
In related news, Digital Journal reported last month the coffee chain intends to add alcohol to its menu options.