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Starbucks Raising Prices Right Before Nationwide Launch Of Mobile Order & Pay

Starbucks Raising Prices Right Before Nationwide Launch Of Mobile Order & Pay
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Starbucks Corporation (NASDAQ: SBUX) announced on Tuesday that it will be raising prices of its drinks by $0.05 to $0.20.

RJ Hottovy, Morningstar senior restaurant and retail analyst, was on CNBC to weigh in on this and to discuss whether this will have affect on the company's sales.

Will Be Successful In Passing This On

"I think what will be interesting to see is how quickly they can pass this through the consumers," Hottovy began. "And frankly, given the success they have had in 2012 and 2014 when you saw price increases probably not at the same magnitude, I think they will be very successful [in] passing this on."

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He continued, "The other interesting thing is this is happening right before the nationwide launch of the mobile order and pay initiative that the company has, which will be interesting because I don't think prices are going to be as transparent to consumers through their mobile ordering system.

"And I think they'll have a good chance of success when that initiative launches and I think they will be able to pass it on and at that point I probably do become a little bit more incremental positive on the name."

One Of Strongest Brand In The Consumer Space

Hottovy was asked if Starbucks is immune to price hikes. He replied, "I think it's one of the strongest brands in consumer space today. That's a foundation of what we call a wide moat rating for this company and it's one of the strongest moats in the consumer space today."

Latest Ratings for SBUX

Oct 2016RBC CapitalMaintainsOutperform
Sep 2016WedbushMaintainsOutperform
Sep 2016CLSAMaintainsBuy

View More Analyst Ratings for SBUX
View the Latest Analyst Ratings

Posted-In: morningstar RJ HottovyAnalyst Color CNBC Restaurants Analyst Ratings Media General Best of Benzinga


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