Starbucks raises prices as inflation and labor costs rise

Starbucks will raise prices this year, the coffee giant said Tuesday, blaming supply chain disruptions and a sharp rise in labor costs. ...

Starbucks will raise prices this year, the coffee giant said Tuesday, blaming supply chain disruptions and a sharp rise in labor costs.

In the last three months of last year, the company’s profits soared 31% to $816 million, Starbucks said in its quarterly earnings release on Tuesday. Revenue reached $8.1 billion, a 19% jump from the same quarter a year ago.

The company raised prices in October 2021 and again in January 2022, executives said Tuesday, with more increases to come.

“We expect supply chain disruptions to continue for the foreseeable future,” said Kevin Johnson, President and CEO of Starbucks. “We have additional pricing actions planned for the remainder of this year, which play an important role in easing cost pressures, including inflation.”

The price of dishes on the menu of fast food restaurants has increased 8% in 2021, the biggest jump in more than 20 years, according to government data, with chains citing higher costs for food, transport and workers.

Starbucks also said it has increased Covid-19 payroll expenses, including paid time off for employees to get vaccinated or for those who have contracted the virus. He also said he was spending more on training “to cope with labor market conditions”.

“While demand has been strong, this pandemic has not been linear,” Johnson said in a statement, adding that the company had “experienced higher than expected inflationary pressures.”

John Culver, the chief operating officer, said the price increases had “no significant impact on customer demand”.

Starbucks shares fell 5% in after-hours trading after announcing its results for its first fiscal quarterbefore recovering some of these losses.

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Newsrust - US Top News: Starbucks raises prices as inflation and labor costs rise
Starbucks raises prices as inflation and labor costs rise
Newsrust - US Top News
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