Are Starbucks Prices Going Up? (Is Starbucks Affected by Inflation? + More Information)

Starbucks Latte is now almost $5! Are Starbucks prices going up? The coffee chain blames the hike on inflation and increased labor costs.

Yes. Starbucks increased its menu prices for the third time this January. I am a coffee lover. Every time I visit Starbucks for my usual caffeine dose, I notice an increase in the price of drinks. For the past few weeks, I have had to pay a few cents more for the same cup of Café Latte.

I can’t be the only one who is experiencing this. You’ll find out in this post if you’re also wondering why Starbucks prices are rising. I also explain how the coffee chain is affected by inflation and its effects on the end consumer.

Why are Starbucks Increasing Prices?

Starbucks is increasing prices due to high inflation costs. Earlier this year, the company announced that it would increase its menu prices due to supply constraints, rising inflation, and increased labor costs. This came after the Omicron Covid-19 variant swept across nations, causing labor shortages resulting from further Covid-19 restrictions.

Starbucks is increasing prices to offset its rising operating costs, including rent, labor, transportation, and product supply. The company announced that this year’s pricing action would be essential in mitigating staffing issues and cost pressures.

It seems like the plan is already in motion. Recently, Starbucks announced a pay raise for its hourly employees, which would be the fourth in 18 months. This pay raise is part of the company’s efforts to improve labor conditions adversely affected by the Covid-19 pandemic. Employees also get paid time off, paid sick off, and other health benefits.

Is Starbucks Supply Chain Affected by Inflation?

Yes, Starbucks prices have been on the rise due to increasing inflation. The company was forced to raise prices to offset its rising operating costs. Everything from food, labor, rent, and transportation is becoming more expensive.

Besides increasing menu prices, Starbucks announced it would reduce spending on promotions and marketing in 2022. The coffee giant is paying more for essential commodities such as coffee, fruits, milk, and other ingredients.

This inflation is also affecting Starbucks consumers as they now have to pay more for food, beverages, and other Starbucks products. Items are becoming way more expensive, and customers can’t handle them. Many customers have since taken to social media to express their frustrations with the hope of having the prices reduced.

How has inflation affected Starbucks?

Starbucks missed estimates for comparable sales and quarterly profits due to inflation. Similar sales in China, Starbucks’ fastest-growing market, declined by 23%, overshadowing growth in North America. The highly contagious Omicron variant caused this decrease in sales. The Chinese government was forced to restrict travel and shut down businesses to curb the spread.

Starbucks blames its high menu prices on the ongoing supply chain issues and high labor costs that have eaten into the company’s profits. The company is also faced with product shortages that led to the suspension of several items on its menu.

Some popular beverages, such as the Very Berry Hibiscus, Mocha, and Chai Latte, are no longer on the Starbucks menu. The coffee chain has also had to make changes to some of the drinks available due to a shortage of ingredients.

FAQ Section

Is Starbucks downsizing employees?

Not at the moment. Between 2021 and 2022, Starbucks lost about 60% of its worldwide employees due to Covid-19. The coffee chain was forced to downsize to stay afloat after the pandemic ravaged the entire world and affected businesses negatively. However, Starbucks is now back in business and working hard to keep its employees. The company recently committed to investing in stores and partners by increasing employee training, lifting pay for store managers, and launching an app to communicate directly with partners in the US.

How much will a latte cost at Starbucks after the price increase?

Starbucks did not specify which drinks would increase in price. Even so, customers are already noticing the rising costs of beverages, including Latte. A basic tall-sized latte is now going for $3.95. With no add-ons or fancy fixings. The price increases with your options and may vary with the store location. In regions like Vietnam, a Latte can cost up to $7 a cup. Customers are seeing how the concept of inflation can impact an ordinary item, such as a cup of coffee.

Does Starbucks have shortages due to inflation?

Yes. Starbucks confirmed having shortages caused by constraints in the supply chain. They are running out of flavored syrups, berries, oat milk, and other key ingredients used to make their popular refreshers. Because of this, the company removed several drinks from its menu as it worked to restock the ingredients.