On Tuesday, the coffee giant said Starbucks would raise prices this year, blaming supply chain disruptions and steep rise in labor costs.
In the last three months of last year, the company’s profits jumped 31 percent to $816 million, Starbucks said in its quarterly earnings report on Tuesday. Revenue rose to $8.1 billion, up 19% year-over-year.
The company raised prices in October 2021 and again in January 2022, executives said on Tuesday, and more price hikes to come.
Kevin Johnson, president and chief executive officer of Starbucks. “We have additional pricing actions planned through this year’s balance that will be important to mitigating cost pressures including inflation.”
The menu of dishes at the fast food restaurant increased in price 8% in 2021, the biggest increase in more than 20 years, according to government data, with chains due to higher food, transportation and labor costs.
Starbucks also said it has increased spending on payroll for Covid-19, including paid time off for employees getting vaccinated or for those who have contracted the virus. It also said it was spending more on training “to address labor market conditions.”
Mr Johnson said in a statement: “Despite very strong demand, this pandemic is not linear.
John Culver, chief executive officer, said the price increase was not making “any meaningful impact on customer demand”.
Starbucks shares fell as much as 5% in after-hours trading after the company announced the results, because its fiscal first quarterbefore recovering some of those losses.
https://www.nytimes.com/2022/02/01/business/starbucks-prices.html Starbucks raises prices as inflation and labor costs fall