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Why Starbucks Prices Went Up as Coffee Beans Got Cheaper | The New York Times

Starbucks isn’t the place to go for cheap coffee. It is selling an experience, not a commodity.

That approach has been immensely successful, drawing in millions of customers and propelling Starbucks stock to stellar returns. But the company’s strategy has created an odd situation this summer: It has raised retail prices for much of the coffee brewed in its stores just as coffee prices on world commodities markets have fallen.

Consider that once, long ago, coffeehouses were the trading centers of world financial markets. If you wanted to know the price of any commodity, you could find it while sipping coffee in London. But this year, if your only information about commodity prices came from coffee sold at Starbucks stores, you might have to conclude that a bull market was underway.

The opposite is true, however. Coffee has been caught in a commodities downdraft that intensified briefly last week as China, a big commodities consumer, devalued its currency. The currencies of commodity producers like Malaysia, Indonesia, Russia, Colombia and Brazil have fallen for months now, along with oil, iron and steel. Coffee has taken one of the deepest dives.

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Why Starbucks Prices Went Up as Coffee Beans Got Cheaper – The New York Times.

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