The Starbucks logo is seen on a storefront in Boston on October 14, 2022.
Michael Dwyer/AP
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Michael Dwyer/AP
The Starbucks logo is seen on a storefront in Boston on October 14, 2022.
Michael Dwyer/AP
Starbucks beverages are the most expensive they have ever beenbut customers keep coming back.
As store prices nationwide rose due to inflation, sales continued to climb, the company said in its earnings report released Thursday.
The global coffee chain posted record sales in the last fiscal quarter that ended in October. In North America, sales increased by 11% compared to the same period last year.
Starbucks saw a 10% increase in the average ticket, meaning customers spent 10% more on every purchase this year than they did in 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 a year earlier — another all-time high, said Rachel Ruggeri, executive vice president and chief financial officer. , during a conference call with investors.
But profits fell to $1.1 billion last quarter from $1.3 billion a year earlier.
Since its competitors are also feeling the heat of inflation, Starbucks has more room to raise 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 retain their customers so much that they’re still able to retain those particular customers,” he said.
Still, the company faces challenges elsewhere as it continues to oppose national organizing.
Earlier this week, federal labor officials ordered Starbucks to reopen a popular location in Ithaca, New York, which the company closed earlier this year. Workers at the Ithaca location near Cornell University, who voted 19 to 1 to unionize, allege Starbucks closed the location due to union activity.
Workers United, an affiliate of the huge Service Employees International Union, filed a complaint with the National Labor Relations Board on Tuesday.
As NPR previously reported, more than 300 stores have held union elections and approximately 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 account for approximately 3% of approximately 9,000 company-owned sites across the country.
Plus, any negative PR from union activity doesn’t seem to have a huge impact on sales, according to Reibstein.
“Organization is almost a separate issue,” he said, explaining that few customers are concerned about labor and union issues.
Starbucks founder and interim CEO Howard Schultz said the company plans to add eight new stores a day to reach a goal of 45,000 locations worldwide by 2025.
“We continue to manage the business in today’s challenging operating environment,” Schultz told investors on the conference call.
And don’t expect prices to drop anytime soon.
“Right now, we’re at a stage where everyone is expecting inflation and not too discouraged that Starbucks is doing it,” Reibstein said.