[Click eStock] "Starbucks Coffee Price Increase, Operating Profit Expected to Rise 20% This Year"

[Asia Economy Reporter Ji Yeon-jin] Kiwoom Securities forecasted on the 10th that Starbucks Company, a subsidiary of Emart, will see its operating profit increase by about 20% this year due to the coffee price hike.

Starbucks Company recently announced that it has decided to raise the prices of 46 out of 53 Starbucks beverages by 100 to 400 KRW each. This price increase is the first in 7 years and 6 months since July 2014.

Park Sang-jun, a researcher at Kiwoom Securities, stated, "This price increase is judged to have been decided at a level to defend against profitability deterioration caused by rising raw material costs." He added, "However, considering Starbucks' consumer loyalty, market dominance, and the possibility of customer recovery due to the gradual return to normal life, the annual operating profit growth rate of Starbucks Company this year is estimated to exceed 20% compared to the previous year."

The price of Starbucks' representative product, Americano, will rise from 4,100 KRW to 4,500 KRW, an increase of 9.8%. Starbucks has a beverage ratio of about 75% in total sales, and considering that the price increase rate of sub-products is relatively low, Starbucks Company's overall average selling price (ASP) is estimated to rise by about 6%.

However, the price of coffee beans, which is estimated to account for a large portion of raw material purchases (about 15% of total company sales in 2020), has surged sharply. Last year, the average Arabica coffee futures price soared 52% compared to the previous year's average. Currently, the futures price has risen about twice compared to the beginning of last year.

This content was produced with the assistance of AI translation services.