It’s not your imagination. Your Starbucks run costs more.
The coffee giant’s prices have been on the rise and increased in October and then again this January, Starbucks president and CEO Kevin Johnson said Tuesday during the company’s quarterly earnings call with analysts and investors.
And with labor, transportation and supply corsts growing, more price increases are planned for this year.
“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,” Johnson said.
Prices can vary by location and by region. In Fort Lauderdale, a venti cappuccino cost $4.95 Wednesday before tax but the same drink was $5.45 in New York City.
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The seasonal Pistachio Frappuccino blended beverage in venti was $6.25 in New York compared to $5.95 in Florida.
Starbucks said it is cutting back on marketing and promotions to help offset its rising costs. But even with the higher costs, officials said consumer demand is up.
“There is a pent-up demand for Starbucks and for people wanting and longing to return to their normal routines,” Johnson said.
Starbucks hours impacted at some locations
Last month, Starbucks announced some locations were temporarily scaling back operations due to staffing issues amid omicron.
Johnson said Tuesday that Starbucks has hired more workers than anticipated during the quarter, which led to higher training costs. Johnson said attracting and retaining workers continues to be a challenge for Starbucks as well as other retailers.
“The highly transmissible Omicron variant amplified staffing shortages in our supply chain, resulting in higher-than-planned distribution and transportation costs,” he said.
In October, the company said it was raising workers’ pay to help ensure a steady workforce. Johnson said Tuesday that $1 billion investment is going forward, and is critical to Starbucks’ success. The company said all of its U.S. workers will earn at least $15 – and up to $23 – per hour by this summer. Workers can also get a $200 recruitment bonus to help attract new employees.
Staff shortages have been hitting a bevy of industries amid the latest COVID-19 surge. Airlines have had to cancel flights in recent weeks due to a high number of employee sick calls, and hospital staffers have been calling out sick in record numbers.
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Contributing: Associated Press