Drinking a daily cup of coffee just got slightly more expensive this week.
Starbucks, the leading US coffee retailer, recently announced that it has raised the prices of its brewed coffee by 10 to 20 cents in its US stores. While the prices on other drinks is said to remain the same, this move is particularly significant as it targets the most consumed type of coffee in the United States.
This increase highlights the retail store company’s necessity to adjust its prices to inflation to keep profits high. The massive fixed costs associated with its activity (store, staff, machines) leave the firm no choice, it must charge customers higher prices to sustain their activity.
Such a move illustrate the increasing complexity of traditional business models in the retail industry: they have no choice but charging higher prices to their consumers to remain profitable. The arrival of new online retail platforms such as GOffee are able to preserve consumer’s welfare by keeping coffee prices low.
The future of consumption has to be found in those new ecologically and consumer friendly technologies.
Thibault Genouville
