Fox Business: Starbucks Ahead of Commodity Curve
Food and beverage retailers don’t always succeed in anticipating price movements in the commodities that go into their products – the dark art of hedging against raw materials prices can hold some costly surprises for its practitioners.
Fortunately for coffee drinkers, however, Fox Business Network reports that Starbucks (SBUX) has already bought enough coffee to get through the rest of the year.
Starbucks Chairman & CEO Howard Schultz told Fox’s Liz Claman that he is concerned with the broad trend in rising commodity prices. “There is no doubt in my mind that financial speculation has driven coffee prices and other commodities to record highs,” Schultz said.
Expressing a sentiment that brings relief to Starbucks fans, Schultz said he does not think Starbucks customers should bear the brunt of rising commodity prices. As for next year, Schultz said the company would find a way to deal with further pricing uptrends if necessary:
We will navigate through the crisis of coffee prices if it continues through fiscal 2012. What we have said publicly is we don’t want to pass this price increase on to our consumers. We don’t think that’s the right thing to do.
This is better news for consumers of coffee than it would be for consumers of less compelling items. Consumers’ first line of defense against rising prices is to cut back on consumption.
For those of us that rely on coffee for that extra bit of get-up-and-go in the morning, that just isn’t an option.
Related posts:
- Graphic Evidence: Commodity Prices EscalateCommodity prices are going up, especially the ones involving materials involved in food production. ...
- Top 10 Food Stocks To Watch In 2011One of the great things about an efficient market is that it's easy to identify the winners and...
- A Sweet Way to Play Political InstabilityWith the plethora of stories of rising food prices during the past year, it seems like consumers and...
- Commodity ETF Divergence: Blame It on the ContangoTwo seemingly disparate groups may have a lot in common: those wondering why a hedge fund would take...
- Top 10 Commodity Bubble ReadsValuation bubbles are everywhere these days, as ubiquitous as the effervescence of champagne on New Year’s Eve. Actually,...
Short URL: http://www.traderdaily.com/?p=12180
