Starbucks Prices Rising Again In Niles, Morton Grove: Here’s Why

NILES, IL — Starbucks will soon be raising prices at all stores amid disruptions brought on by the omicron variant, supply chain issues, increased labor costs and inflation, representatives of the multinational coffee retailer announced.

Starbucks officials said Tuesday during a conference call that the company had missed its quarterly profit benchmark during the omicron surge, which has contributed to shortages of workers and increased costs.

Starbucks locations in Niles and Morton Grove include: 6801 Dempster St., 7161 N. Milwaukee Ave., 9483 N. Milwaukee Ave. and inside the Target store at 6150 W. Touhy Ave.

Starbucks company officials highlighted “extraordinary cost pressure” and “higher than anticipated costs from training and onboarding” new employees.

“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,” Starbucks CEO and President Kevin Johnson said in a statement.

Inflationary costs were unexpectedly amplified throughout December, and such disruptions were expected to continue, according to a company statement. It is the second time in four months that the company has raised its prices, the New York Times reported.

According to the company's earnings statement, the operating income of its North America segment increased to $1.1 billion in the first quarter of its 2022 fiscal year, up from $802.8 million in the same quarter the prior year. Its operating margin was up from 17.2 percent to 18.9 percent.

That profit increase was "primarily driven by sales leverage from business recovery, the impact of pricing, lower restructuring expenses primarily associated with the North America Trade Area Transformation, sourcing savings and the benefits of the closure of under-performing stores," according to the statement.

"This expansion was partially offset by enhancements in retail store partner wages, increased supply chain costs due to inflationary pressures and higher spend on new partner training, onboarding and support costs to address labor market conditions," it said.

John Culver, the company’s chief operating officer, said turnover was higher than before the pandemic and the company had to reduce store hours in response, Business Insider reported.

Prices on everything from groceries to gasoline have risen to their highest point in 40 years, placing a major strain on those who live in the nation's most expensive states.

President Joe Biden has vowed to alleviate the effects of inflation, but many across the country are adapting to an unrelenting state of sticker shock.

According to the U.S. Bureau of Labor Statistics, the Consumer Price Index for All Urban Consumers, or CPI-U, for the Chicago-Naperville-Elgin metropolitan area rose by 6.6 percent over the 12 months ending in December.

Food prices rose by 7.4 percent. Energy prices rose by 34.6 percent. The price of shelter was up by only 3.5 percent, but the cost of household furnishing and operations rose by nearly 11 percent and the cost of new and used cars was up by 17 percent, according to the bureau.

Nationwide, the all-items consumer price index had the largest 12-month increase since the period ending in June 1982. When food and energy are excluded, it is still the highest increase since February 1991.

"U.S. inflation pressures show no sign of easing," said James Knightley, chief international economist at the financial services company ING. "It hasn't been this high since the days of Thatcher and Reagan. We could be close to the peak, but the risk is that inflation stays higher for longer."

Related: Inflation In IL: How Much More Is Food, Gas Costing Residents?