(The Hill) — Starbucks on Tuesday announced that it will be increasing the prices of its products in 2022, citing rising inflation, supply chain disruptions and increasing labor costs, according to a statement by the company.
The coffee giant missed its projected quarterly profit as the highly-contagious omicron variant of COVID-19 swept across the globe, causing increased labor shortages and further coronavirus-related restrictions, particularly in China, which is Starbucks’ fastest-rising market, which was discussed in the company’s conference call.
The move marks the second time in just four months that the company has hiked prices, having also increased menu item costs in October 2021, reports The New York Times — and more price rises are on the way this year, according to Starbucks executives.
“Although demand was strong, this pandemic has not been linear and the macro-environment remains dynamic as we experienced higher-than-expected inflationary pressures, increased costs due to Omicron, and a tight labor market,” said Kevin Johnson, Starbucks president and CEO.
Starbucks wrote in its statement that it is “taking additional pricing actions planned through the balance of the year to mitigate cost pressures, including inflation as it looks to position its business for the future.”
Generally, fast food prices have shot up eight percent in 2021, which is the highest increase in two decades, as chains have to offset higher labor costs, food, and transportation, the Times reports.
The coffee company also upped its focus and spending on employee benefits to address labor market conditions. Starbucks increased COVID-19 pay for workers, which includes paid time off for employees who get sick and paying workers to get vaccinated against the coronavirus.
Starbucks chief operating officer John Culver said, according to the Times, that the price hikes had not made “any meaningful impact to customer demand.”