Starbucks said on Tuesday that they plan to raise prices this year due to inflation and rising labor costs.
The company raised prices back in October of 2021 and again recently at the beginning of January. Their profit grew 31% to $816 million during the last three months of 2021. Revenue had a 19% jump compared to the same quarter in 2020, growing to $8.1 billion.
"We anticipate supply chain disruptions will continue for the foreseeable future," Kevin Johnson, the president and chief executive of Starbucks, said. "We have additional pricing actions planned through the balance of this year, which play an important role to mitigate cost pressures including inflation."
Starbucks said that it had increased spending on COVID-19 pay for employees, including paid time off if someone contracted the virus or needed time off to get vaccinated.
The company said in October that it would raise wages for baristas to at least $15 an hour, with most hourly employees earning an average of almost $17 an hour by the summer.
"Although demand was strong, this pandemic has not been linear,” Johnson said, adding that the company "experienced higher-than-expected inflationary pressures."
The price of menu items at fast-food restaurants rose 8% in 2021, according to government data. It was the biggest jump in nearly 20 years as companies dealt with higher costs for food, transportation, and workers.
Despite rising prices, Starbucks said that they haven't seen it make an impact on customer demand.
"We have not seen any meaningful impact to customer demand," said John Culver, Starbucks chief operating officer. "To the contrary, our customer demand continues to grow."
Starbucks did not specify the products for which it would raise prices.
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