Mojo Coffee has admitted it "didn't do a good job" of explaining why it bumped up its coffee prices after the Government lifted the minimum wage.
The Wellington-based coffee company - which has 31 stores across the capital and Auckland - put up signs informing customers that while it welcomed the minimum wage increase, it would be raising the price of its products as a result.
The price hike on certain food items came into effect from April 2, the day after the minimum wage rose by 75c to $16.50 an hour.
The changes saw the price of a regular flat white increase by 10c from $4.40 to $4.50, while a large mocha increased by 20c from $5.50 to $5.70. All other coffees increased by 10 cents.
The signs provoked a strong reaction from the public, with some inferring it was a sign the company didn't pay its staff enough - an assertion Mojo has rejected.
"We didn't do a good job of explaining that a minimum wage increase meant our workers who were already earning above minimum wage would also see an increase," Mojo Coffee general manager Katy Ellis said.
"We've seen some negative reaction, especially online. Some of this was because people thought we were putting the prices of a cup of coffee up by 75c when it's actually closer to 10c.
"A lot of people thought it was because we don't pay our staff enough."
Ms Ellis said many customers had responded positively to the company saying it would increase pay rates to its front-line staff.
"It's important to us that an increase for the lowest wage earner also has the appropriate impact on those people who are in higher pay brackets which means that a number of staff who are in those higher brackets are also getting salary increases," she said.
But she said the way that the company communicated the reason for the price hike was regrettable.
"We should have made this clearer and we're sorry to our staff and customers for upsetting people."
The minimum wage boost on April 1 was the biggest increase in the last decade.
In the coalition agreement between Labour and New Zealand First, the parties committed to lifting the minimum wage to $20 an hour by April 2021.