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, the biggest coffee retailer worldwide, is known for its high-quality coffee and elegant setting. 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 prices are so high because of customer loyalty and the quality of its products. Rent and other operating expenses are also factors in the high prices. Finally, investments in employees like good wages and benefits and ethical and sustainable business practices add to higher costs.

  • Starbucks’ high prices are due to its ability to understand the market. For all these reasons, regular customers will be willing to pay a higher price. Read on to see more reasons Starbucks prices are high.
  • 1. Loyalty to Brands
  • Starbucks has amassed a loyal customer list that number in the hundreds of thousands over the years.

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

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

    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.

    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
  • Coffee at home is cheaper than buying it. It’s not difficult to get a great cup of coffee from Starbucks while on your way to school or work.

    Starbucks customers may be willing to pay more to get their coffee prepared by trained baristas and to not have to wash cups or make coffee afterwards.

    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. Enjoy 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, 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.

    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
  • A daily coffee habit is addictive, and high prices will not prevent regular coffee drinkers from getting their morning jolt of caffeine.

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

    Starbucks is known for its positive image and popular brand image.

    In other words, customers are willing to pay more for products from a company that treats its 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.

    Even though it results in higher prices of Starbucks products, this is acceptable for customers who prefer to buy ethically-owned companies.

  • 7. Overheads & Rents
  • Starbucks has been a huge success because it is strategically located in key locations.

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

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

  • 8. The Training of Employees
  • Starbucks is committed to continuous employee training, beginning with newly-hired baristas.

    Starbucks requires new workers to learn how to make all of the beverages on their menu. This is similar to being a bartender.

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

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

    That means ethically sourced coffee comes from people who receive a fair wage, and are provided with safe work conditions.

    Additionally, this reduces negative environmental effects of every step of the production process. These practices increase the operating cost and price.

    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 previously set sustainability goals, and failed sometimes to achieve them.

    However, the company’s efforts to reduce waste and use renewable resources and materials do find public support, even if it means paying more for products.

  • 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.

    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 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. is a Starbucks coffee and farmer equity program. These practices aid farmers and their communities by preserving workers’ rights as well as sustainable farming practices.

    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. Right Market Information
  • 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.

    If you are looking to learn more about Starbucks, you can also read our posts on whether or not Starbucks has oat milk, if Starbucks refreshers have caffeine, and why Starbucks failed in Australia.

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

    Starbucks is known for its great taste and convenience.

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

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