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.

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 can be so costly because it charges high prices due to its customer loyalty, convenience and quality. Also, expenses like rent and operating costs factor into the higher prices. Higher costs also come from investments in employees. These include good wages, high benefits, ethical and sustainable practices and business strategies.

  • Finally, Starbucks is so expensive because it has read its market correctly. These customers will pay more for regular services. You can read more to find out why Starbucks has higher prices!
  • 1. Brand loyalty
  • Starbucks has maintained a strong customer base for many years.

    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 has a strong brand image that includes high-end coffees and other beverages. This doesn’t mean the company is losing sales.

    Customers realize that Starbucks offers more than just good coffee.

    If that cup of coffee costs twice what it would at the convenience store, they’re ok with that.

  • 2. Customers Will Pay Higher for Convenience
  • Coffee at home is cheaper than buying it. However, it is also much easier to grab a good cup of Starbucks coffee on your commute to work or school.

    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 is more expensive than the one you get in the corner shop, but the taste is so much better.

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

    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
  • 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.

    Neither will regular Starbucks customers be displaced by an increase in coffee prices.

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

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

    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. Training employees, however is another costly recurring expense which drives up the 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.

    Also, other overheads, like utilities, keep rising, and customers eventually foot the bill for higher operating costs.

  • 8. Formation for employees
  • Employee training is a continuous process at Starbucks, starting with the 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. Ethically Sourced And Sustainable Products
  • Starbucks prides its self as an ethical corporation that only uses ethically sourced material throughout all its operations.

    With that, ethically sourced coffee is produced by workers paid a fair wage and who have safe 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.

    However, customers have shown their preference for buying coffee and other products from a company that follows ethical and sustainable business practices.

  • 10. Sustainability
  • Starbucks has committed to sustainability in a public way by reducing its carbon emissions by 50% before 2030.

    Previously, Starbucks has set itself sustainability goals and sometimes failed to meet 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 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.

    Also, Starbucks is an innovator in sustainability, leading the efforts to develop the “Green Cup” to minimize the problem of plastic pollution.

    Starbucks also recently released compostable and recyclable cups. They could help reduce millions of plastic cups being thrown in the garbage.

    Starbucks has also made it a point to be more sustainably run. Innovation on such a large scale is expensive and requires significant investment.

  • 12. Farming Communities Need Your Support
  • Starbucks does not just invest in employees; it supports farmers and communities in which the coffee, tea, or cocoa that Starbucks uses is 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.

    This investment will result in Starbucks customers paying higher prices.

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

  • 13. Right Market Reading
  • Starbucks is proving its customer base right by ensuring that high prices are supported for many reasons.

    Our posts include information about Starbucks’ oatmilk, whether Starbucks refreshers are caffeine-free, and what happened to Starbucks in Australia.

  • Conclusion
  • Starbucks keeps its product prices high thanks to loyal customers who will support it.

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

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

    See also  17 Most Popular Starbucks Drinks

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