Starbucks

Why Is Starbucks So Expensive

Why Is Starbucks So Expensive In 2022? (13 Reasons Why)

Five Guys Enterprises, LLC
Five Guys Burgers and Fries
Type
Private
Industry Food
Genre
Fast casual restaurant
Founded
Founders Jerry Murrell, Janie Murrell


[1]

Headquarters

,

United States
Number of locations
1,500


[2]


(2016)
Area served
  • Australia


    [3]

  • Austria


    [4]

  • Belgium
  • Canada
  • China
  • France
  • Germany
  • Hong Kong
  • Republic of Ireland
  • Kuwait
  • Netherlands


    [5]

  • New Zealand


    [6]


    (announced)
  • Italy


    [7]

  • Luxembourg
  • Malaysia


    [8]

  • Qatar
  • Saudi Arabia
  • Singapore


    [9]

  • Spain
  • United Arab Emirates
  • United Kingdom
  • United States
Key people
Jerry Murrell, Jim Murrell, Matt Murrell, Chad Murrell, Ben Murrell, Tyler Murrell


[10]

Products
Hamburgers

,

french fries

,

hot dogs

,

soft drinks

,

milkshakes
Revenue US$ 831.95 million


[11]


Decrease
(2016)
US$ 92.94 million


[11]


Increase
(2016)
US$ 57.68 million


[11]


Increase
(2016)


Total assets

US$ 393.29 million


[11]


Increase
(2016)


Total equity

US$ 244.48 million


[11]


(2016)
Owner Murrell family
Number of employees
15,000


[12]


(2016)
Website

fiveguys.com

Starbucks, which is the largest coffee retailer in the world, has a reputation for serving good coffee in upscale surroundings. It also has a reputation for being expensive.

Millions of Starbucks customers aren’t discouraged by the high price of coffee and other beverages, but they still make regular visits to Starbucks to get their favourite drink.

Why Is Starbucks So Expensive In 2022? (13 Reasons Why)

Starbucks: Why is it so costly in 2022

Starbucks is expensive because the company charges high prices for its products. This happens due to customers loyalty, convenience, quality, and price. Additionally, rent and operating cost are factors that contribute to higher prices. Higher costs can also be caused by higher salaries and high-quality benefits for employees, as well as ethical and sustainable business methods.

  • Starbucks is so pricey because it understands its customers. These customers will pay more for regular services. Continue reading to learn more about why Starbucks prices are so high!
  • 1. Loyalty to Brands
  • Over the years, Starbucks has developed a loyal customer base that is numbered in the millions.

    This is an example of how regular Starbucks customers make a Starbucks visit a part of their everyday routine. They can’t wait to change this.

    Starbucks has a strong brand loyalty and will continue to sell its favorite Starbucks drinks at low prices.

    Starbucks’s premium brand image includes higher coffee prices and beverages that don’t harm sales.

    Also, customers realize that they’re paying for the overall Starbucks experience and not just a good cup of coffee.

    They’re fine with a cup of coffee that costs twice as much at the convenience shop.

  • 2. Customers Will Pay Higher for Convenience
  • Coffee at home is cheaper than buying it. But, there’s also no doubt that it takes much less effort to pick up a cup of excellent coffee at Starbucks on the way to work or school.

    Starbucks customers can pay more for convenience and a skilled barista making their morning coffee.

    Starbucks shops are also strategically located to make it easy for commuters and office workers to grab a coffee or relax with a soothing drink.

  • 3. It’s all about the Taste
  • Starbucks coffee may cost more than the cup you can get at the corner store, but it also tastes so much better.

    Starbucks was, by example, the first coffee shop to provide espresso to American customers.

    Starbucks customers show that over the years they are willing to spend more on a cup of good-quality coffee.

  • 4. It’s addictive coffee
  • Coffee is addicting, so it’s not surprising that regular coffee drinkers are unable to resist the temptation of daily caffeine fixation.

    Customers will not be turned away by an increase of Starbucks’ already expensive coffee.

  • 5. Wages And Benefits
  • Starbucks employees get great wages and excellent benefits, including paid time off and medical insurance.

    Starbucks has many desirable advantages, but its regular operating costs are very high. This explains the high price.

    Starbucks’ ethical culture of work is part its brand identity and appeal.

    This means that customers will pay more to purchase products made by companies who treat their employees well.

  • 6. Employee Career Development
  • Starbucks invests heavily in its staff through ongoing training. The cost of training employees drives up their prices.

    This can lead to increased prices for Starbucks products. However, it is also accepted by customers as they choose to do business with ethical companies.

  • 7. Overheads and rents
  • The strategic location of its stores plays a big part in the Starbucks success story.

    But, high-traffic and luxurious neighborhoods come at a steep price, which can impact drinks prices.

    Customers eventually pay the higher operating expenses because of other overheads such as utilities.

  • 8. Instruction for Employees
  • Starbucks has a continual process of training employees, which starts with newly hired baristas.

    Starbucks employees are required to be skilled in making the various drinks that the company offers.

    Since Starbucks requires its employees to learn about coffee, how to make drinks, and the company culture, the cost of training impacts the prices of drinks heavily.

  • 9. The best ethically sourced and sustainable products
  • Starbucks is proud to be an ethical business that uses sustainably sourced materials throughout its entire production and operation chain.

    This ensures that ethically-sourced coffee is produced from workers who are paid fair wages and have safety working conditions.

    Also, it minimizes the negative impact of the entire chain of production on the environment. These practices do increase operating costs and prices.

    Customers prefer coffee, and other products that are ethically and sustainably managed by ethical businesses to purchase.

  • 10. Sustainability
  • Starbucks made an important public commitment to sustainability, cutting its carbon footprint 50% by 2030.

    Starbucks had previously established sustainability goals but sometimes fell short of them.

    The company does find support from the public for their efforts to minimize waste and utilize renewable resources. However, this can mean that customers will have to pay more for certain products.

  • 11. Innovation
  • Starbucks leads innovation in many areas. They constantly introduce and test new beverages that are appealing to their customers.

    Starbucks is an innovative company in sustainability. It has led the development of the “Green Cup”, reducing plastic pollution.

    With that, Starbucks has recently introduced recyclable and compostable cups, which could prevent millions of cups from being thrown away in the trash.

    Starbucks has also made it a point to be more sustainably run. This is why innovation at this scale requires substantial investments, leading to higher prices.

  • 12. Farming Communities Need Your Support
  • Not only does Starbucks invest in its employees, but it also supports the farmers and communities where the coffee, tea, and cocoa used in its products are grown.

    C.A.F.E. stands for Starbucks Coffee and Farmer Equity. These practices help farmers and communities to maintain workers’ rights, and sustain farming practices.

    This investment will result in Starbucks customers paying higher prices.

    Customers will pay more to get a cup of ethically brewed coffee.

  • 13. Right Market Research
  • Starbucks knows its market well and is confident that loyal customers will be willing to pay higher prices.

    You can read more on Starbucks by visiting our blogs about whether Starbucks uses oat milk and if Starbucks refreshers contain caffeine. Also, we have a post explaining why Starbucks was unsuccessful in Australia.

  • Conclusion
  • Starbucks has a strong customer base which will continue to support it and can maintain high prices for its products.

    Starbucks has a reputation for providing a great customer experience, along with delicious coffee.

    .Why Is Starbucks So Expensive In 2022? (13 Reasons Why)

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