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, the biggest coffee retailer worldwide, is known for its high-quality coffee and elegant setting. 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 is so expensive in 2022

Starbucks prices are so high because of customer loyalty and the quality of its products. Also, expenses like rent and operating costs factor into the higher prices. Additionally, higher prices are caused by the investments made into employees such as good wages and benefits or ethical and sustainable business models.

  • Starbucks’ high prices are due to its ability to understand the market. All of this is why regular customers are more willing to pay more. Keep reading for more reasons Starbucks’ prices are higher.
  • 1. Brand Loyalty
  • 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 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.

    Customers are also aware that Starbucks customers pay for an entire experience, not just the coffee.

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

  • 2. A lot of people are prepared to pay extra for the convenience
  • You can make your coffee at home cheaper. There’s no doubt about the fact that Starbucks is much more convenient than buying a coffee in Starbucks.

    With that, Starbucks customers are willing to pay more for the convenience of having a trained barista make their morning coffee for them and not having to wash the cups and coffee maker afterward.

    Starbucks is strategically placed for those who commute to work or are looking for a calm drink or caffeine boost.

  • 3. Try it!
  • Starbucks coffee might be more expensive than the average cup at the corner grocery, but it tastes better.

    Starbucks for instance, made espresso available widely to American coffee drinkers.

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

  • 4. The Addictiveness of Coffee
  • The habit of drinking coffee every day is addictive. However, high coffee prices do not stop coffee drinkers who are regulars from getting their caffeine fix.

    A rise in Starbucks coffee’s already steep prices will also not drive customers away.

  • 5. Wages And Benefits
  • Starbucks is a great employer and provides excellent benefits such as health insurance and paid leave.

    Starbucks enjoys many attractive benefits, and this results in high operating costs.

    Starbucks’s ethical work culture, however, is part and parcel of the brand’s image.

    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 employees by providing training and support throughout their careers. However, training employees is another major recurring expense that drives up prices.

    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 and Rents
  • Starbucks is largely successful because of the strategic locations of their stores.

    High-traffic real estate and high-end neighborhoods are more expensive than others, so this can have an impact on the cost of drinks.

    Additionally, overheads like utilities continue to rise and eventually customers will have to pay higher operating costs.

  • 8. For employees, training
  • Starbucks offers continuous training for employees starting at the new hire baristas.

    Starbucks has many different drinks, so new employees must learn to mix them.

    Starbucks has made it a requirement that employees are educated about coffee and how to prepare drinks.

  • 9. Sustainable and ethically-sourced products
  • Starbucks has a reputation for being an ethical and ethical company. It uses only ethically sourced and sustainably-produced materials in all aspects of its production process and operations.

    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 can raise operating costs and increase 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 previously set sustainability goals, and failed sometimes to achieve them.

    Public support is there for the company’s efforts in reducing waste and using renewable resources and materials, even if this means that products will cost more.

  • 11. Innovation
  • Starbucks has led innovation from many angles. Starbucks introduces new products to appeal to customers every day, including new beverage flavors.

    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 publicly pledged to improve its sustainability. This is why innovation at this scale requires substantial investments, leading to higher prices.

  • 12. Farming Communities: 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., or Starbucks’ Coffee and Farmers Equity is one example. These practices aid farmers and their communities by preserving workers’ rights as well as sustainable farming practices.

    Starbucks customers pay higher prices due to this investment.

    But, like sustainability, customers will be willing to pay more if they get an ethical cup.

  • 13. Reading The Market Right
  • All of this shows Starbucks’ ability to read the market and has convinced its loyal customers that they will pay more for a variety of 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’ loyal customers are what allows it to maintain its high-priced products.

    Starbucks’s customers love their Starbucks experience and will continue to buy from it, despite the rising prices.

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

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