July 7, 2015 -- Part II; Glut Of Coffee Beans But Starbucks To Raise Prices

This is not good: the minimum wage effects are starting to be felt in California and the ObamaCare mandate kicks in this fall for the rest of America's businesses.

Forbes is reporting:

As we keep trying to point out to people there really isn’t anything even remotely resembling a free lunch when it comes to the discussion of wages and labor. Meaning that just because well meaning liberals wave their magic wand and decree that wages will rise there will indeed be countervailing effects. And in San Francisco, where the minimum wage was recently raised we did indeed see that comic book shop insisting that it just couldn’t survive.

And now we’ve another tale, this time from Chipotle. Beef prices have been rising around the country so they’ve raised the prices, around the country, of their beef products. Wages in San Francisco have been rising strongly so they’ve raised the prices of all their products in San Francisco strongly. There really is no free lunch. A rise in wages will come out of either less labor being employed, lower profit margins (and fast food doesn’t have those wide enough to take the strain) or price increases to consumers.

By the way, on the news last night, Starbucks will be raising their prices 5% to 20% on their drinks starting today. No reason was given, but this isn't rocket science. Let's see how long it's take to find the story.

Yup, here it is, in USA Today:

Starbucks is raising prices again starting Tuesday, with the increases ranging from 5 to 20 cents for most affected drinks.

The Seattle-based company also raised prices nationally about a year ago.

A small and large brewed coffee will each go up by 10 cents in most areas of the country, Starbucks says. That would bring the price of a large coffee to $2.45 in most U.S. stores.
Some other coffee sellers are cutting prices.

Last week, The J.M. Smucker Co. said it would cut prices for most of its coffee products because of declines in future prices for unroasted coffee beans. In an emailed statement Monday, Starbucks Corp. said coffee costs are only part of its expenses, which also include rent, labor, marketing and equipment.

I misheard the television news story, only 5 cents to 20 cents for drinks.

By the way, food prices will stay the same.

I don't think Starbucks can cut staff; they already seem to have minimum number of employees at any given shift. However, I can see other fast food restaurants cutting staff as self-ordering kiosks become widespread and more 3-D printers start making sandwiches.

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McDonald's

With the price of Starbucks coffee going up, I may have to make McDonald's my regular, and Starbucks my second choice.

Last night I started this post, then abandoned it, but I will re-post as much as I wrote here:

I don't know if there will be much about the Bakken in this post. I would recommend that folks who are here expecting to read something about the Bakken to scroll down or check out the links at the sidebar at the right.

I'm taking a break, literally and figuratively, I guess. May and I drove out to San Pedro (south Los Angeles) with our two older granddaughters, leaving Grapevine (northeast of Ft Worth, TX) about 10 days ago. It's been a relaxing vacation. The girls have no desire to go to Disneyland.

About 4:00 p.m. this afternoon, it appeared the girls were in their own world, and May was doing her own thing, so I asked if I had the rest of the day free. May said I did.

Yesterday, I bicycled a hard 40-mile round trip from San Pedro up to Redondo Beach and then farther up the coast (near LAX).

Tonight I decided I would just go to Redondo Beach and back, 20 miles. I'm in Redondo Beach now, at a McDonald's writing this note.

It's hard to believe. There were six new items I posted between that draft written last night and posted just now. 

I forgot to look what my tall Starbucks cost me this morning. For newbies, "tall" is the smallest size coffee drink routinely served. I say "routinely," because if I recall correctly, one can ask for a "small" coffee at Starbucks and they will find a smaller cup from behind the counter. That was true some years ago; I don't know if it is still true.

Yesterday, my Starbucks cost $1.75 (with tax); in Texas, it is $1.89 with tax. I didn't get a receipt and they don't post the cost of their simple coffee drinks in this particular Starbucks, so let's just assume it stayed at a $1.75. At McDonalds, I can get three food items -- sandwich, fries, and a drink -- each for a dollar off the dollar menu. Along expensive Redondo Beach last night, the three food items off the "dollar menu" cost me $4.12. So, not quite a "dollar menu" but close.

When traveling, if I stop for breakfast at McDonald's it is only coffee ($1.00) and hash browns (or what passes for hash browns) at about a dollar also. That usually lasts me to well past noon, and sometimes all day when traveling. One doesn't burn many calories driving.

Reminds me of Kim.