Starbucks Puerto Rico will not be raising prices like US counterpart
Starbucks operations in Puerto Rico will not be raising prices, bucking the decision by its US mainland counterpart of increasing menu prices to deal with the effects of inflation and labor shortage on its bottom line.
News is my Business confirmed that the hike will not apply to the local market.
“The increase in prices announced by Starbucks in the United States this week does not apply to the local market. Each market continually evaluates the price of its products to balance the needs of the business with the service offered to customers,” local company officials confirmed in a statement.
Starbucks opened its first Puerto Rico store in San Juan in 2002 and is now run by operating licensee Baristas del Caribe, LLC. The local chain has 29 stores and employs about 500 people in Puerto Rico.
Earlier this week, Starbucks reported its first quarter 2022 earnings, which revealed a 19% growth in revenue at $8.1 billion year-over-year. Same-store sales worldwide grew by 13%.
In the US mainland, sales grew by 18% year-over-year during the first quarter.
While the company reported growth in the quarter, Starbucks also discussed its “rapid increase in supply chain costs in the US related to distribution and transportation driven by supply chain staffing shortages.”
“This required the company to identify more expensive alternatives to meet strong customer demand. While supply chain driven inflationary costs were unexpectedly amplified and rapidly accelerated in December, these disruptions are expected to continue for the foreseeable future,” it noted in a release.
To offset those expenses and other investments, the company confirmed it will reduce discretionary spending, implement “operational efficiencies throughout the organization,” and take the pricing actions announced.
