Last year, fast-food prices rose 8 percent, reportedly the biggest increase in 20 years. Reports in November indicated that prices would continue to escalate in 2022. One major chain that raised prices twice in recent months announced this week that more price hikes are in the foreseeable future to offset soaring costs.
Coffee giant Starbucks announced on Tuesday that it will be increasing prices of its products this year due to rising inflation, labor costs, and supply chain disruptions.
A report from The New York Times noted that the company's profit increased 31 percent last year to $816 million. The company raised prices in recent months, October 2021 and January 2022, and more increases are expected.
"We anticipate supply chain disruptions will continue for the foreseeable future," said Kevin Johnson, the president and chief executive of Starbucks, to The Times. "We have additional pricing actions planned through the balance of this year, which play an important role to mitigate cost pressures including inflation."
The Hill noted that Starbucks missed its projected quarterly profit as the Omicron variant swept the nation, furthering the pandemic-related labor shortages and restrictions.
"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," Johnson told The Times.
Johnson added 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."
Starbucks increased spending on COVID-19 pay, including paid time off for employees to get vaccinated or for those who've contracted the virus. Johnson also said that it was spending more time on training "to address labor market conditions."
John Culver, the company's chief operating officer, told The Times that the price hikes had not caused "any meaningful impact to customer demand."
Earlier this year, Starbucks made headlines when it scrapped its vaccine requirement following a Supreme Court ruling striking down the Biden administration's vaccine-or-test mandate for large companies.
In a memo sent to employees obtained by the Associated Press, Culver wrote that "we respect the court's ruling and will comply."
