NEW YORK (TheStreet) -- Starbucks (SBUX) ticked upward 2.14% to $76.20 at 1:58 p.m. on Wednesday after CEO Howard Schulz told CNBC the coffee chain has no plans to increase prices at its approximately 10,000 company-run establishments despite the rising price of coffee.
"I think this is a time in America where raising prices is not the right strategy," Schultz said on Squawk on the Street. "We have to provide value. We have to provide trust with our customers. I want to manage through this without raising prices in our retail stores. We may need to raise prices in the grocery business, which is a different story."
Increasing coffee prices have caused concern among some analysts with regard to 2015 prices. Some analysts believe that Starbucks' stock will remain weighed down as coffee prices remain high.
Schulz, however, told CNBC and TheStreet's Jim Cramer from Starbucks' analyst day in Seattle that such concerns are overblown.
"I think the market, unfortunately, has completely overreacted and misread the coffee situation," Schultz said. He pointed out Starbucks has already purchased nearly 18 months' worth of coffee and said coffee accounts for less than 20% of its cost of goods. He also noted Starbucks has dealt with higher prices numerous times in the last 40 years.
"The truth of the matter is that dairy is probably a bigger issue for us going forward than coffee, but we will be able to maintain our guidance, our EPS and absolutely manage through and negotiate through any rise in coffee costs," he said. "So I think the market should realize that is a nonevent."