Coffee chains crank up prices

By Korea Herald
  • Published : May 6, 2012 - 19:32
  • Updated : May 6, 2012 - 19:32
Franchises raise prices, draw complaints from their customers

Coffee franchises are raising prices, making consumers anxious that it might cause a domino effect ahead of the summer, the high season for beverage sales.

Starbucks Coffee Korea, the nation’s leading coffee franchise, announced on Thursday that it will charge 300 won more on 32 of its drinks starting Monday. Caffe Bene, which has the greatest number of stores here, also raised prices last month of the drinks sold at its main Gangnam store in southern Seoul.

“The milk price, labor costs and rent all sharply rose last year. We have been tolerating the factors until now, but could no longer avoid the price adjustment,” said Starbucks through a statement. 
A woman enjoys a cup of coffee at Samcheong-dong, central Seoul. (The Korea Herald)

The coffee house also took off 100 won to 200 won from prices of 13 drinks and maintained those of 10. But consumers find it rather mean as the price increase mainly occurred on the best selling products including the top five ― americano, cafe latte, caramel macchiato, cafe mocha and green tea frappuccino. The ones marked down include less popular items like lavender earl grey or white mocha frappuccino.

Caffe Bene increased around 100 won to 500 won of the drink prices main Gangnam store. The price of the americano, for example, rose from 4,000 won to 4,500 won and cafe latte from 5,000 won to 5,300 won.

“At stores in special areas, the prices can be higher or lower than average. We raised the price in the Gangnam store because it is situated in a special area with a big population and high rent. We currently do not have plans to raise prices of branches in other areas,” said Kim Dong-han, an official at Caffe Bene. The brand has 700 branches throughout the nation.

Other coffee shops such as Hollys Coffee, The Coffee Bean & Tea Leaf and Angel-in-Us said that they do not have immediate plans to raise prices. But considering how most usually follow when the industry’s No. 1 company raises prices, consumers are concerned.

“The way Starbucks raised prices of the best-selling items and dropped that of unpopular ones is a typical tactic to earn more profit. Consumers may accept the price increase, even as an effort to share the burden if it points out acceptable reasons, but what it is doing now is simply deceiving consumers,” said Choi Eun-mi, an official at Korea National Council of Consumer Organizations.

Meanwhile, food and beverage producers which have been under self-control to cooperate with the government’s price stabilizing policies are reportedly getting ready to increase prices as well.

By Park Min-young (