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]



(2016)
US$ 57.68 million


[11]



(2016)


Total assets

US$ 393.29 million


[11]



(2016)


Total equity

US$ 244.48 million


[11]


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


[12]


(2016)
Website

fiveguys.com

Starbucks is the most popular coffee shop in the world. It has an excellent reputation for providing great coffee in elegant surroundings. It also has a reputation for being expensive.

The high prices for coffee, other drinks, and snacks don’t prevent millions of loyal customers from making their daily visits to Starbucks for their favorite drink.

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

Starbucks is so expensive in 2022

Starbucks can be so costly because it charges high prices due to its customer loyalty, convenience and quality. The higher prices are due to expenses such as rent and operational costs. Higher costs can also be caused by higher salaries and high-quality benefits for employees, as well as ethical and sustainable business methods.

  • Starbucks has correctly analyzed its market and is therefore so costly. Because of all this, customers who are regulars will often 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.

    For example, these regular customers have made a trip to Starbucks part of their daily routine and can’t imagine changing it.

    Because of brand loyalty, Starbucks’ high prices and price increases will not deter regular customers from getting their favorite Starbucks drinks.

    Starbucks has a strong brand image that includes high-end coffees and other beverages. This doesn’t mean the company is losing 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. People Are Willing To Pay More For The Convenience
  • Home-made coffee is more economical than making it at work. It’s not difficult to get a great cup of coffee from Starbucks while on your way to school or work.

    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 locations are strategically located for office workers and commuters who need a quick fix of caffeine or something more relaxing.

  • 3. Enjoy the taste
  • Starbucks coffee costs more than coffee you could get from the corner shop but Starbucks coffee tastes great.

    Starbucks, for example, was the first company to offer espresso in large quantities and easily accessible to American coffee drinkers. This markedly changed the taste of drip-filter coffee.

    Starbucks customers are known for paying more to get a great cup of coffee over the years.

  • 4. Coffee is addictive
  • Regular coffee drinking is addictive. High prices won’t stop regular coffee drinkers getting their daily dose of caffeine.

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

  • 5. Wages And Benefits
  • Starbucks pays good wages and offers excellent benefits to its employees, including paid leave, health care insurance, and college tuition.

    Starbucks is known for its desirable attributes, which means that their operating costs are often high. Prices reflect this.

    Starbucks has a strong reputation for its ethical workplace culture.

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

  • 6. Employee Career Development
  • Starbucks invests in its employees through training at the start and throughout their careers. However, training employees is another major recurring expense that drives up 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. Rents And Other Overheads
  • The strategic location of its stores plays a big part in the Starbucks success story.

    However, real estate in high traffic and upscale neighborhoods comes with a hefty price tag, impacting the prices of drinks.

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

  • 8. The Training of Employees
  • Starbucks employees are trained continuously, beginning with new baristas.

    For example, new employees have to master making all the drinks on the Starbucks menu, which requires skills similar to a bartender.

    Starbucks employees must learn coffee making techniques and culture.

  • 9. Product Sourced From Ethical Suppliers and Sustainable
  • 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.

    It also minimizes environmental impact from the production chain. This practice can increase costs of operation and raise prices.

    But customers prefer buying products and coffee from companies that follow sustainable and ethical business practices.

  • 10. Sustainability
  • Starbucks has made a significant public commitment to sustainability by cutting its carbon footprint by 50% by 2030.

    Starbucks set its sustainability goals before and occasionally failed to reach 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 has been a pioneer in innovation across many fronts. Products that appeal to its customers like new drink flavors are continuously being created and tested.

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

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

    Starbucks has publicly committed to making their operations more sustainable. So, innovation on this scale takes substantial investment, which leads to higher prices.

  • 12. Farming Communities: Support
  • Starbucks not only invests in its workers, but also helps the communities and farmers where its coffee, tea and cocoa are grown.

    C.A.F.E., or Starbucks’ Coffee and Farmers Equity is one example. These practices assist farmers and rural communities with sustainable farming practices and worker rights.

    Unfortunately, this investment results in higher prices for Starbucks customers.

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

  • 13. Reading The Market Right
  • Each of these reasons shows that Starbucks has read its market right and that its loyal customers will support high prices for several 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 has a strong customer base which will continue to support it and can maintain high prices for its products.

    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  When Is Starbucks Happy Hour
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