Starbucks posts massive sales even as U.S. inflation soars

  

Category:  Wine & Food

Via:  buzz-of-the-orient  •  3 weeks ago  •  34 comments

By:   MARY YANG npr

Starbucks posts massive sales even as U.S. inflation soars

S E E D E D   C O N T E N T



Starbucks posts massive sales even as U.S. inflation soars

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The Starbucks logo is seen on a storefront in Boston on Oct. 14, 2022.  Michael Dwyer/AP

Starbucks drinks are  the most expensive they've ever been , but customers keep coming back.

As stores nationwide hiked prices due to inflation, sales continued to climb, the company said in its earnings report released on Thursday.

The global coffee chain reported record-breaking sales over the last fiscal quarter that ended in October. In North America, sales were up 11% compared to the same period last year.

Starbucks saw a 10% increase in the average ticket, meaning customers spent 10% more on each purchase this year than they did during the same period last year, on average, according to the report.

In North America, Starbucks generated $6.1 billion in revenue last quarter, up 15% from the prior year — another all-time record, said Rachel Ruggeri, Executive Vice President and CFO, on a conference call with investors.

But profits were down, at $1.1 billion last quarter compared to $1.3 billion the prior year.

As its competitors also feel the heat of inflation, Starbucks has more room to hike up its own prices, said David Reibstein, a marketing consultant and professor at the University of Pennsylvania's Wharton Business School.

"As they raise the price, they've got so much customer loyalty that they're still able to keep those particular customers," he said.

Still, the company faces challenges elsewhere as it continues to push back against national unionization.

Earlier this week, federal labor officials ordered Starbucks to re-open a popular location in Ithaca, New York, that the company shut down earlier this year. Workers at the Ithaca location near Cornell University, who voted 19-1 to unionize, allege that Starbucks closed the location due to union activity.

Workers United, affiliated with the massive Service Employees International Union, filed a complaint with the National Labor Relations Board on Tuesday.

As NPR previously reported , more than 300 stores have had union elections and about 250 Starbucks stores have successfully unionized over the past year. A store in Buffalo, New York was the  first to form a union  last December.

But unionized stores in the United States make up about  3%  of about 9,000 company-owned locations across the country.

Plus, any negative PR from the unionization activity doesn't seem to have a huge impact on sales, according to Reibstein.

"The unionization is almost a separate issue," he said, explaining that not very many customers are concerned about the labor and union issues.

Starbucks founder and interim CEO Howard Schultz said the company plans to add eight new stores per day to reach a goal of 45,000 locations globally in 2025.

"We continue to manage the business through today's challenging operating environment," Schultz told investors on the conference call.

And don't expect prices to come down anytime soon.

"Right now, we're at a stage where everybody is expecting inflation and not overly put out by the fact that Starbucks is doing it," said Reibstein.




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Buzz of the Orient
Professor Principal
1  seeder  Buzz of the Orient    3 weeks ago

Here's one reason there's inflation - people stupid enough to pay $5 for a cup of coffee.  There is a Starbucks a two minute walk from the front door of the building I live in and I really wonder as I walk by it why people are so willing to throw money away.  I go back to the time when a cup of coffee cost a dime at a diner or Woolworths.  I brew my own from canned ground coffee in my coffeemaker for one mug every morning and that's good enough for me.

 
 
 
Vic Eldred
Professor Principal
1.1  Vic Eldred  replied to  Buzz of the Orient @1    3 weeks ago

You think that people are being stupid for paying $5 for a cup of coffee?  Starbucks Coffee isn't even that good.

Have we ever analyzed who drinks there and why?

Do you remember the Wine company that increased sales by raising prices? They made their product into a status symbol and IMO that is just what Starbucks has done.

 
 
 
Buzz of the Orient
Professor Principal
1.1.1  seeder  Buzz of the Orient  replied to  Vic Eldred @1.1    3 weeks ago

Yes

I don't know

no

 
 
 
Buzz of the Orient
Professor Principal
2  seeder  Buzz of the Orient    3 weeks ago

I apologize for taking up so much valuable space on the NT Front (Home) Page at such a critical time for the members to post their articles/seeds attacking each other over the midterms. 

 
 
 
independent Liberal
Freshman Quiet
3  independent Liberal    3 weeks ago

Starbucks sources their beans from irresponsible commercial coffee growers. If you like coffee with pesticides, enjoy your cancer.

 
 
 
Buzz of the Orient
Professor Principal
3.1  seeder  Buzz of the Orient  replied to  independent Liberal @3    3 weeks ago

Au contraire, Voltaire, my coffee is better than theirs.

 
 
 
JohnRussell
Professor Principal
4  JohnRussell    3 weeks ago

Starbucks has always been a prime example of style over substance. A lot of people think it is a status symbol to be seen with the Starbucks logo on their paper coffee cup as they walk down the street or are in the office. 

It's decent coffee, but nothing at all on the level of the reverence some hold for it. 

 
 
 
shona1
Junior Participates
5  shona1    3 weeks ago

Starbucks lost 10s of millions here... people don't like it and we have our own coffee culture...most Starbucks shut down here.

$5 is the norm here for a capucinno, $5 in China sounds rather expensive seeing it is meant to be cheap living over there?

 
 
 
Buzz of the Orient
Professor Principal
5.1  seeder  Buzz of the Orient  replied to  shona1 @5    3 weeks ago

This was from a 9 year old article - it was around US$4 then for a "grande" latte.

Much has been made of a CCTV report concerning the high price of a cup of Starbucks coffee in China. CCTV-13, one of China’s state-sponsored television stations, ran a report on October 20 alleging Starbucks charges more for a coffee in China than in other countries and earns high profits as a result (the original report in Chinese is  here  and a summary  here ). The main comparison by CCTV was the price of a medium-sized (a “grande” in Starbucks parlance) latte in China (RMB 27) to its price in Chicago (RMB 19.98), London (RMB 24.25), and Mumbai (RMB 15). The implication of the report was that the price in China was too high.
 
 
 
shona1
Junior Participates
5.1.1  shona1  replied to  Buzz of the Orient @5.1    3 weeks ago

Hmm ripped off big time..

 
 
 
Buzz of the Orient
Professor Principal
5.1.2  seeder  Buzz of the Orient  replied to  shona1 @5.1.1    3 weeks ago

Exactly, but I think John has indicated the reason they're still in business here - a show of success and wealth is not beyond Chinese people. 

 
 
 
charger 383
Professor Quiet
6  charger 383    3 weeks ago

I'll stick with X Large refill for $1 if I bring my cup at Sheetz, and I get some free ones,  They opened a Starbucks in my town but I have not been there but it seems busy.  It is in same building as ABC store and Jersry Mikes subs that I do visit. 

 
 
 
sandy-2021492
Professor Principal
6.1  sandy-2021492  replied to  charger 383 @6    3 weeks ago

I think Sheetz has better coffee, anyway.  Starbucks tastes burnt to me.

 
 
 
Raven Wing
Professor Guide
6.1.1  Raven Wing  replied to  sandy-2021492 @6.1    3 weeks ago

The only thing I buy anything from Starbucks is their Dark Roasted Sumatra whole beans. I buy the whole beans and grind only enough for 3 cups of coffee at a time in my personal grinder, then brew the coffee in my French Press Bodum. 

The reason I buy the whole beans and only grind enough for 3 cups of coffee each time, is that the whole beans will stay fresh longer than the ready ground coffee.  

I have never heard of Sheetz, nor know of one anywhere around here in Calif. I don't like sweet coffee or tea, nor the flavored drinks. 

 
 
 
sandy-2021492
Professor Principal
6.1.2  sandy-2021492  replied to  Raven Wing @6.1.1    3 weeks ago

Sheetz is a gas station/convenience store chain.  They do made-to-order food and drinks, including coffee and coffee-house style drinks.

I generally drink my coffee black, no sugar, but I'll admit to an occasional latte or frappe.  Not often, though. They're sugar bombs.  I make sweetened iced coffee at home sometimes, but don't use nearly as much sugar as Starbucks or Sheetz.

 
 
 
Kavika
Professor Principal
6.1.3  Kavika   replied to  sandy-2021492 @6.1    3 weeks ago

I agree, sandy Starbucks coffee is bitter and has a burnt taste to me. I love my coffee and am lucky enough that I have a friend that is a Kona coffee grower on the big island and he sends me packages of his coffee. There is nothing in the world like 100% Kona coffee, expensive as hell but heaven to drink. 

 
 
 
Buzz of the Orient
Professor Principal
6.1.4  seeder  Buzz of the Orient  replied to  Kavika @6.1.3    3 weeks ago

I regret that when I was on the big island, I didn't know anything about Kona coffee.  It would have been a lot better for me to have brought home a case of it, instead of bringing home a piece of lava rock.

 
 
 
Kavika
Professor Principal
6.1.5  Kavika   replied to  sandy-2021492 @6.1    3 weeks ago

Did you know that in Ojibwe, Sheetz would be spelled, Shiitz? 

No forked tongue here.jrSmiley_7_smiley_image.png

 
 
 
sandy-2021492
Professor Principal
6.1.6  sandy-2021492  replied to  Kavika @6.1.5    3 weeks ago
Sheetz would be spelled, Shiitz? 

Well, I have heard complaints about the effects of the food jrSmiley_2_smiley_image.png   Never experienced them myself, though.

 
 
 
Ender
Professor Principal
6.1.7  Ender  replied to  sandy-2021492 @6.1.6    3 weeks ago

We are getting a Buc-ee's here. It is not known for coffee though. Just a huge store.

512

512

 
 
 
Raven Wing
Professor Guide
6.1.8  Raven Wing  replied to  sandy-2021492 @6.1.2    3 weeks ago

Thank you for the information on what Sheetz is. I drink my coffee and tea without sugar, hot or cold. I'm not much on sweets of any kind, but, I like a vanilla ice cream sandwich now and then. I bought a Latte once and took a sip of it, then handed the rest to my Granddaughter. Much too sweet for me.

 
 
 
Buzz of the Orient
Professor Principal
6.2  seeder  Buzz of the Orient  replied to  charger 383 @6    3 weeks ago

In China, coffee is growing in popularity and a lot of privately owned coffee houses are starting to spring up in major cities.  A while ago I posted an article about one such establishment that opened here in Chongqing.  Here is a link to it ->

 
 
 
charger 383
Professor Quiet
6.3  charger 383  replied to  charger 383 @6    3 weeks ago

setting here enjoying the morning and Sheetz coffee now

 
 
 
Greg Jones
Professor Guide
7  Greg Jones    3 weeks ago

For that little caffeine kick in the morning I switched to Mountain Dew (generic).

 
 
 
Ed-NavDoc
Professor Quiet
8  Ed-NavDoc    3 weeks ago

I have never liked Starbuck's coffee. Way too expensive. We had a Starbucks kiosk inside the local Safeway store here in my hometown on the border and it lasted about two years because of a lack of customers. In addition, I started boycotting Starbucks after their BS shenanigans by not allowing people legally allowed to carry open or concealed firearms into their locations.

 
 
 
Gordy327
Professor Principal
9  Gordy327    3 weeks ago

Coffee is a cup of hope in a world full of chaos and Mondays. 

 
 
 
GregTx
Junior Participates
9.1  GregTx  replied to  Gordy327 @9    3 weeks ago

I like that. Would you mind if I borrowed it and had it printed on some mugs?

 
 
 
squiggy
Junior Quiet
9.1.2  squiggy  replied to  GregTx @9.1    3 weeks ago

There's always the original blend

shopping?q=tbn:ANd9GcTeMbdZo_UopODET2qq1XatsjA3DhYTn69EscYWYXxSiFq3aEgE-B1RnljmfTVobQeNkOEgDekE9A&usqp=CAE

 
 
 
GregTx
Junior Participates
9.1.3  GregTx  replied to  squiggy @9.1.2    3 weeks ago

I like that as well, kinda goes with the Monday thing. Been looking to get a new set to replace my University of Northern Texas mugs...

384

 
 
 
Ed-NavDoc
Professor Quiet
9.1.4  Ed-NavDoc  replied to  squiggy @9.1.2    3 weeks ago

I'll take a cup of two of that!

 
 
 
Buzz of the Orient
Professor Principal
9.1.5  seeder  Buzz of the Orient  replied to  squiggy @9.1.2    3 weeks ago

I can't open your image.  Please explain what it is.

 
 
 
Buzz of the Orient
Professor Principal
9.1.6  seeder  Buzz of the Orient  replied to  GregTx @9.1.3    3 weeks ago

That should help us build an NT membership of good new people. s/

 
 
 
Hallux
Junior Principal
9.2  Hallux  replied to  Gordy327 @9    3 weeks ago

Switch to Lavazza and say goodbye to Monday ... every day becomes Tuesday.

 
 
 
Ender
Professor Principal
10  Ender    3 weeks ago

Ah yes, I would like a Grande iced caramel macchiato. 

 
 

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