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    Starbucks Raises Drink Prices & Employee Pay

    Select coffee sizes will increase 10 to 20 cents.

    SEATTLE — Starbucks Corp. is making some changes, both at the register and in the back office.

    The Seattle-based coffee giant is increasing the prices on some select sizes of coffee 10 to 20 cents, and upping the prices on espresso and tea latte beverages 10 to 30 cents. Starbucks said it expects the average customer ticket to increase by about 1 percent as a result of these beverage adjustments; however, 65 percent of beverage prices have not changed.  

    "Pricing is continually evaluated on a product-by-product and market-by-market basis in our stores in order to balance business needs while continuing to provide value to our loyal customers," the company said in a statement. "We are committed to providing value to our customers in meaningful ways, including Starbucks Rewards, special in-store promotions and competitive pricing, and believe that our approach to value properly balances the experience we provide customers with our need to effectively run our business."

    The pricing moves come as Starbucks prepares for some employee-related changes. In a letter to employees on July 11, CEO Howard Schultz addressed several new developments including compensation, Bean Stock, and enhanced health care benefits.

    Effective Oct. 3, all employees and store managers in U.S. company-operated stores will receive an increase in base pay of 5 percent or greater. The range of increase will be determined by geographic and market factors and is intended to ensure Starbucks remains a retail employer of choice in all the markets where we operate, he explained. 

    In addition, Starbucks will be adding a future annual enhancement to its Bean Stock program — which is designed to reward partners with restricted stock units. Specifically, the company will be doubling the annual bean stock award for partners that reach two years of continuous service, Schultz said.

    "The combination of these changes will result in compensation increases between 5 percent and 15 percent. Our field leadership will be following up with market-by-market details in the coming weeks," he said. "These changes will begin to go into effect as early as October, and we remain committed to doing more each year to invest in our partners as part of our long-range, strategic plan."

    The coffee chain is also evolving its benefits program and online benefits platform so employees may shop, compare and choose health coverage starting July 18.

    "In simple terms, the new health care options allow partners to only pay for the coverage they want and will actually use. We estimate that eligible partners could save as much as $800 annually by moving to a plan that better meets their needs. For partners selecting family coverage, savings are potentially more, perhaps as much as $2,600 annually. Whatever plan you choose, any savings go right back into your paychecks," Schultz said.

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