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. Starbucks is known for being costly.

High prices for coffee, tea, snacks, and other drinks don’t stop millions of Starbucks loyal customers making daily trips to Starbucks to purchase their preferred drink.

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

Starbucks: Why is it so costly in 2022

Starbucks can be so costly because it charges high prices due to its customer loyalty, convenience and quality. Higher prices can also be attributed to operating and rent costs. Higher costs are also caused by investments made in people like high wages, benefits and ethical business practices.

  • Finally, Starbucks is so expensive because it has read its market correctly. Because of all this, customers who are regulars will often pay more. Continue reading to learn more about why Starbucks prices are so high!
  • 1. Brand loyalty
  • Over the years, Starbucks has developed a loyal customer base that is numbered in the millions.

    The regular Starbucks customers, for example, have made it a daily part of their routines and wouldn’t mind changing that.

    Starbucks will continue to serve its customers with their favourite Starbucks beverages, despite the high price and increase in prices.

    In fact, higher prices for coffee and drinks are part of the upscale Starbucks brand image and don’t hurt the company’s sales.

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

    The convenience store will charge twice the price of a cup coffee, but they are fine with it.

  • 2. Customers Will Pay Higher for Convenience
  • It’s more affordable to make your own coffee. 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 pay more for the convenience that a barista can make their morning cup of coffee and they don’t have to clean the cups or coffeemaker afterwards.

    Also, Starbucks stores are located strategically for busy commuters or office workers to get a caffeine fix or a relaxing drink.

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

    Starbucks is an example of a company that made espresso readily and widely available for American coffee drinkers. It was a major change from drip-filter coffee.

    Over the years, Starbucks customers have shown that they are consistently willing to pay more for a good cup of coffee.

  • 4. Coffee is addictive
  • It is easy to become addicted to coffee, even if the price tag doesn’t prohibit regular coffee-lovers from enjoying their morning cup of coffee.

    Either way, regular Starbucks customers will continue to be loyal despite the increase in Starbucks coffee’s already-expensive prices.

  • 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.

    Customers will be willing to pay higher prices for products that are made by companies that treat employees well.

  • 6. Employee Career Development
  • Starbucks invests in their employees with training from the very beginning to continue on throughout their careers. But, the cost of training employees can drive up costs.

    Although it means that Starbucks products are more expensive, customers can still accept these higher prices because they want to purchase from ethical companies.

  • 7. Overheads & Rents
  • Starbucks’s success is dependent on the location of its shops.

    Real estate in high-traffic areas and expensive neighborhoods can come with steep prices, which will impact the price of beverages.

    Other overheads like utilities keep increasing, so customers end up paying more for operating costs.

  • 8. Employee Training
  • Starbucks offers continuous training for employees starting at the new hire baristas.

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

    Starbucks expects its workers to be knowledgeable about how to make coffee and company culture. This has a significant impact on the price of beverages.

  • 9. Ethically Sourced And Sustainable Products
  • Starbucks prides its self as an ethical corporation that only uses ethically sourced material throughout all its operations.

    With this, ethically sourced coffee can be produced by workers earning a fair salary and working in safe 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 indicate preference to buy coffee and other products produced by companies that adhere to ethical and sustainable business policies.

  • 10. Sustainability
  • Starbucks has publicly committed to sustainability and cut its carbon footprint in half by 2030.

    Starbucks has previously had sustainability goals that were sometimes not met.

    However, public support for the company’s efforts to reduce waste, use renewable resources and material is evident, even if that means more expensive products.

  • 11. Innovation
  • Starbucks is a leader in innovation on many levels. New products, such as drinks with new flavors and appealing to customers, are continually being developed and tested.

    Starbucks has been a leader in sustainable innovation, and is currently developing the “Green Cup”, which will help reduce plastic pollution.

    Starbucks recently launched recyclable and compostable cups. This could reduce the number of disposable cups that are thrown out.

    Starbucks also has made a public commitment to make its operations more sustainable. So, innovation on this scale takes substantial investment, which leads to higher prices.

  • 12. Support For Farming Communities
  • 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.

    For example, Starbucks’ Coffee and Farmer Equity or C.A.F.E. These practices aid farmers and their communities by preserving workers’ rights as well as sustainable farming practices.

    Starbucks customers will pay more for this investment.

    As with all sustainability practices however, coffee drinkers are more willing to pay more for ethical cups of coffee.

  • 13. Right Market Reading
  • These reasons show that Starbucks understands its customers and will continue to support high-priced products for many reasons.

    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 is able to keep its prices high due to a loyal customer base.

    Taste, convenience, and the Starbucks experience all help to ensure that regular customers will stay with the brand even if the already high prices continue to climb.

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

    See also  17 Most Popular Starbucks Drinks
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