Heads-Up, Starbucks Is Raising Its Prices Again

The coffee chain indicated that the supply chain is partially to blame.

Courtesy of Starbucks

Starbucks has joined the legion of businesses raising prices on menu items in the food industry. According to The New York Times, the coffee chain has already raised prices in October 2021 and January 2022 and will continue to do so this year. These changes fall in line with the overall 8% increase in the cost of fast food prices in 2021.

This is not the first time that the company has hiked prices. Starbucks has a consistent history of increases. They rose in 2015, 2016, and 2018 and many customers voiced their displeasure.

Starbucks blames supply chain difficulties and an increase in labor costs as the reason for raising prices. The supply chain has undoubtedly been a challenge for all businesses, as it has led to an increased cost for ingredients, delays in product delivery, and shortages of certain items. Historic levels of inflation compound the issues with the supply chain.

"We anticipate supply chain disruptions will continue for the foreseeable future," Kevin Johnson, the president and chief executive of Starbucks, told The New YorkTimes. "We have additional pricing actions planned through the balance of this year, which play an important role to mitigate cost pressures including inflation."

As for the other factor that Starbucks credits for raising prices—that the labor cost is getting more expensive—I would be remiss if I didn't point out that Starbucks workers across the country are unionizing at corporate-owned shops. As of January 31, 55 of Starbucks' 9,000 corporate-owned stores announced intentions to form unions, and that number is expected to grow exponentially in the coming weeks.

While union labor costs corporations more money than non-union labor, we can take this explanation from Starbucks with a bit more context. The New York Times reports that in the last three months of 2021, Starbucks profits increased by 31% to a total of $816 million. Starbucks has already been offering pay raises of up to $15 an hour for some locations to incentivize more people to apply for jobs and discourage the formation of unions. So this increased cost of labor, while costing the company more money, has yet to cause profits to decrease.

Starbucks executives say that the price increases that have already occurred have not affected overall demand from customers. The company did not disclose how much prices are anticipated to rise.

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Opheli Garcia Lawler is a staff writer at Thrillist. Follow her on Twitter @opheligarcia and Instagram @opheligarcia.