Get Ready to Pay More for Your Starbucks Fix

By Kala Barba-Court, February 18, 2022

Coffee aficionados, it’s time to recalibrate your coffee budget. For the first time since 2018, Starbucks has raised the prices of their drinks by RMB2.

A decline in average purchases and customer transactions, paired with high operating costs and a notable store sales decrease of 14% is said to have triggered the price hike. Other Asian markets like South Korea have also followed suit.

Starbucks President and CEO Kevin Johnson expects more price hikes in 2022, due to rising inflation and an increase in supply chain and labor costs.

Other coffee companies are feeling the pinch as well. Last December, Luckin Coffee increased the price of their drinks by about RMB3, while Canadian chain Tim Horton’s added RMB1-2 to the pricing of selected beverages this month.

It remains to be seen if the price hike will trigger a decline in Starbucks customers. While the price increase may see a consumer shift towards more affordable coffee shops, Starbucks has the advantage of ubiquity and comfort, with branches strategically stationed close to office buildings or places of leisure. In other words, it is a hard habit to shake off.

That said, Starbucks has dealt with its share of controversy in recent months. Last December two outlets in Wuxi, Jiangsu Province were closed and consequently served hefty fines for using expired food ingredients, selling drinks past their sell-by dates and bad hygiene practices.

On February 13, netizens expressed outrage when an employee of a Starbucks outlet in Chongqing asked four on-duty police officers to leave the premises as they were having lunch on the coffeeshop's porch, citing their presence as a bad image for the company.

Starbucks opened its first store in Beijing in 1999. With 5,500 stores in the country, China has the second largest number of Starbucks stores worldwide after to the US.

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