In a first, Starbucks lowers price of some drinks

LOS ANGELES Thu Aug 20, 2009 6:54pm EDT

A Starbucks employee prepares a drink for a customer in their store on Sao Paulo's Alameda Santos June 11, 2008. REUTERS/Rickey Rogers

A Starbucks employee prepares a drink for a customer in their store on Sao Paulo's Alameda Santos June 11, 2008.

Credit: Reuters/Rickey Rogers

LOS ANGELES (Reuters) - Coffee chain Starbucks Corp, which for years raised prices without any customer pushback, said on Thursday that it is cutting prices for the first time on some drinks while boosting prices on others.

The company, which announced in April that it would join other restaurant operators in fine-tuning pricing amid weak consumer demand, will cut the price of popular beverages like small coffees and lattes by 5 to 10 cents in every market, spokeswoman Valerie O'Neil said.

Prices for large, complex drinks such as frappuccinos and macchiatos could go up by as much as 25 cents in some markets, but on average prices will increase between 10 and 15 cents, O'Neil said, without naming specific markets.

The changes are effective in some markets on Thursday and will be rolled out to the remainder of the United States in coming months.

Starbucks pricing varies from market to market.

Starbucks expanded rapidly during the housing boom and has been closing stores, cutting costs and introducing discounts to offset falling traffic.

At the same time, hamburger chain McDonald's Corp has begun focusing on coffee drinks as part of a wider beverage expansion.

(Reporting by Lisa Baertlein, editing by Matthew Lewis)

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