As Starbucks raises prices, I have to wonder if they’ll blame Obamacare.
As previously reported by The Inquisitr, Starbucks is being forced to post nutritional information about their coffee and other products.
Although a Starbucks 25 foot smoking ban might make the coffee shop unpopular with some, everyone will probably cry foul as Starbucks raises prices for its drinks. The Starbucks coffee price increase will begin Tuesday, with Starbucks prices rising by one percent on average. At most, Starbucks coffee will cost around 10 cents higher.
But as Starbucks raises prices some investors are pointing out the price hike may be unfair. Since 2011, the price of coffee beans has dropped like a rock, going from three cents per pound down to around 1.3 cents per pound. That means Starbuck’s major cost is almost halved, potentially increasing their profits by $700 million.
Starbucks responded to this allegation by pointing out that coffee commodity prices historically comprise “less than 10 percent of our overall store operating and occupancy expenses.” The other 90 percent is comprised of “rent, labor, marketing, equipment and other ingredients such as milk and sugar.”
So could Obamacare cause Starbucks to raise its prices? After all, Congress has acknowledged that under Obamacare 40 hours per week needs to be the new standard for full time employment. An Obamacare hiring freeze is affecting about half of all businesses, so maybe Starbucks is raising prices instead of cutting employees hours or letting people go?
“[Starbucks] have been a leader for almost 20 years now in demonstrating our heartfelt commitment to making sure that we provide health coverage for the majority of our people. That cost last year was $250 million. We have faced double-digit increases for almost five consecutive years with no end in sight. … I think as the bill is currently written and if it was going to land in 2014 under the current guidelines, the pressure on small businesses, because of the mandate, is too great.”
As Starbucks raises prices, do you think Obamacare might be to blame?