Starbucks will raise the hourly pay for its US retail workers by at least 3% from 2024, it recently said as it plans to expand its store count amid strong demand for its coffees from younger and more affluent customer base.
The company had last week said it would increase the number of stores globally to 55,000 by 2030 from 38,000, while aiming to double the hourly income of baristas over the next two year from 2020 levels through more working hours and higher pay.
It has about 17,000 stores in North America and its US workers draw an average wage of $15 to $24 per hour and a total compensation, with benefits, of nearly $27 per hour.
Potential Pay Increase
The company said employees with two to five years of service would be eligible for at least a 4% hike, while those with five or more years could get at least a 5% increase in pay.
"Coupled with higher wages and the expansion of hours, these investments have not only resulted in lower turnover... but have also increased hourly total cash compensation by nearly 50% since fiscal year 2020," the company said in a statement.
Consumer Base
Starbucks recently noted that it beat Wall Street targets for fourth-quarter sales and profit as robust demand for its pricey coffees and cold drinks in North America offset a feeble recovery in China.
Starbucks also noted that it benefited from its younger, more affluent consumer base prioritising their morning coffee fix at a time when the wider US restaurant industry grapples with a slowdown wrought by sticky inflation.
"The consumer is stressed, but they're going to go to ... those affordable luxuries... And Starbucks does a great job with that," Stephens analyst Joshua Long said, adding that the 2% rise in customer transactions was 'impressive.'
The coffee chain has also leaned on its breakfast sandwiches, wraps and bakery items to drive up customer spending at stores.
Read More: Starbucks Gets Sales Bump From US Demand For 'Affordable Luxuries'
News by Reuters, edited by Donna Ahern, Checkout. For more retail news, click here. Click subscribe to sign up for the Checkout print edition.
