The café giant on Tuesday raised the price of some items as much as 30 cents as it contends with rising coffee costs. The company also recently gave its employees a raise.
In what Starbucks is calling “a small price adjustment” at its U.S. stores, customers will see increases of 10 to 20 cents on select sizes of brewed coffee as of Tuesday, as well as a 10- to 30-cent jump for espresso beverages and tea lattes. Starbucks said that on the whole, the average spending by a customer per visit will rise 1% and noted that prices on 65% of its beverages have not changed. This is the third year in a row Starbucks has raised prices.
“Pricing is continually evaluated on a product-by-product and market-by-market basis in our stores in order to balance business needs while continuing to provide value to our loyal customers,” Starbucks said in a statement. The company tried to play down the increases by pointing to the bargains customers can get from its loyalty program.
The increases were announced a day after Starbucks said it would give U.S. store employees and managers a raise that will boost compensation by as much as 5% to 15% starting this fall. That decision has come amid rising wages across the restaurant and retail industries at companies from McDonald’s (mcd) to Walmart (wmt) as talent becomes scarcer and pressure to improve customer service increases.
The jumps also come as Starbucks and its competitors like Dunkin’ Brands’ (dunk) Dunkin’ Donuts chain face higher coffee costs: American consumption is expected to rise 1.5% this year alone, reported Bloomberg. Coffee has also reached peak popularity in China, Japan, and India. The high demand is leading to higher prices for beans. The price for arabica-coffee futures was up 20% in June, marking the biggest monthly gain since February 2014, Fortune recently reported.
Over the weekend, Starbucks was forced to announce some of the price increases earlier than planned after the cash registers at many of its restaurants started charging customers the higher prices prematurely.
Customer don’t appear to be balking at its higher prices: U.S. comparable sales for Starbucks have risen consistently in recent quarters.