Community Chat

[MorningLover]

NYPost: The Seattle-based coffee chain is planning even more menu price hikes this year after previous increases last October and January. Company executives blamed the move on inflation, ongoing supply chain woes and rising labor costs that have eaten into Starbucks’ profits.

“We have additional pricing actions planned through the balance of this year, which play an important role to mitigate cost pressures, including inflation, as we position our business for the future,” Starbucks CEO Kevin Johnson said during an earnings call Tuesday.

Johnson noted the Omicron COVID-19 case surge caused additional costs and staffing shortages that were in “excess of our expectations.”

Delivery and transportation of key goods also grew more expensive as Starbucks’ third-party partners experienced delays and labor shortages.

Starbucks did not say which menu items will be more expensive or how much average prices are set to increase.  A venti cappuccino currently costs $5.25 in New York City, according to the coffee chain’s app.

Inflation hit a four-decade high of 7 percent in December. Businesses are paying steeper prices for key commodities such as meat, coffee and dairy products – and passing on some of those expenses to American consumers.

Menu prices at fast-food restaurants rose 8 percent in 2021, according to the Consumer Price Index.  

Starbucks is the latest of several companies to announce price hikes to combat their rising expenses.

The extra costs have eaten into margins. McDonald's profits also missed estimates when it reported its fourth quarter earnings on Thursday.

McDonald’s revealed it raised menu prices by 6 percent in 2021 and said more increases were planned for this year. The company citing the surging cost of raw beef and labor costs as it seeks to train and pay new workers during a nationwide labor shortage.

Starbucks fell short of Wall Street’s expectations for profit and same-store sales in its first-quarter earnings report on Tuesday. The coffeehouse chains is also facing labor pressure as a growing number of its company-owned stores seek to unionize.

[Carolina925]

I'm not a Starbucks fan, their coffee always tastes burnt to me. They are very popular in my little town, population around 190,000, we have 13 stores! Our closest store has to close without notice quite often because they can't find employees or one of their employees has tested positive for Covid. That, of course, has nothing to do with Starbucks, most restaurants around town have the same issues.

I'm a coffee "purist" and prefer only cream in my coffee but I can imagine the cost of all the things they put into the coffees is rising quickly. 

[Oznell]

Very interesting, @MorningLover .   I enjoy Starbucks on occasion, but this makes me sort of glad I still have my vintage battered stove top percolator and even my cranky older Keurig to rely on!   

However, I'm being short-sighted, since just regular coffee beans will keep hiking in price too...

I enjoy your fact-based reporting "from the front" on all subjects, @MorningLover --   keep 'em coming!

[Foxxee]

I wonder how long consumers are going to put up with all these price increases even if they can afford them.  

Businesses and consumers have been placed into a helpless situation when solutions to the problems could begin on Monday.  

[drizzellla]

Can't say it is a surprise. One of the busiest Starbucks in our area is frequently closed with signs on their doors.

This Starbucks used to have cars in line around the building. Now they are sporadically closed.

Can't help business if you drive to that Starbucks and it is closed. You made the trip for nothing. I am sure people will think of that the next time they want to drive to that Starbucks.

Where the Starbucks is there is a long road of just fast food and sit down restaurants. And most of the places have at one time been closed as you drive by. Some have closed permanently. It is a relatively new development. You know the owners have taken a beating in their pocketbook.

No wonder Starbucks missed Wall Street's expectations.

[kaydee50]

I live between a Starbucks on one corner and a Dunkin Donuts on the other.  Haven't been in either.  Fortunately, I am very happy with my Folger's Instant.  Cannot imagine spending $5+ on a cup of coffee.

[goldensrbest]

Every thing is going up in price.

[RollTide2008]

I pay $2.37 for the largest cup of drip coffee my Starbucks offers, it doesn’t cost $5 for a substitute of instant Folgers.

Coffee, dairy products, and labor are going up. Starbucks employees are offered full benefits and have one of the highest starting wages in the quick service environment. I don’t mind paying a little more.

[MorningLover]

Prices must vary in different locations. I only drink the 'regular' coffee, the venti (largest) size is $2.95. My daughter spends a fortune on the 'fancy schmancy' drinks!  

[wagirl]

I'm not the least bit surprised----gird your loins for more of the same----