Naperville Business Attorney Discusses Starbucks’ Plans to Raise Wages, Prices

Starbucks, Naperville business law attorneyFor many business owners, it can be very difficult to keep employee morale high while providing products and services at an affordable price for customers. As a business law attorney, I have helped hundreds of clients deal with this exact concern. Customers need a product they can rely on at a price they are willing to pay, while employees want to feel appreciated and like a part of a team. This week, an iconic American company made two separate announcements, but the effects of the two may end up offsetting each other.

More Money, More Freedom

On Monday, a memo was released by Starbucks CEO Howard Schultz that indicated employees and managers could expect wage increases of at least five percent. The increases will go into effect in October, and the exact amount of the raises will be based on local economic factors in each region the coffee giant serves. In addition, Starbucks promised to increase “bean stock” awards, which are shares of company stock given to workers with two-years of service.

Finally, the memo also said that changes are coming that will allow employees more freedom for self-expression on the job, including unspecified dress code updates. Some workers have mused that Starbucks could be ready to lift its ban on “bright or unnatural” hair colors, which would allow baristas to sport pink or purple hair if they so choose. The company has been long-known for its strict appearance policy prohibiting nail polish, blue jeans, clogs, canvas shoes, watches, and bracelets, though some of the rules were enacted over food safety concerns.

The Other Shoe Drops

One of the long-standing arguments against a significant increase to the minimum wage is that the companies affected by the change would be forced to raise prices to offset the extra expenditures. While the Starbucks announcement is not directly related to the minimum wage debate, it would seem that the premise holds true. The day after the memo regarding higher wages was released, the company announced that it would be raising prices on about a third of its menu. Unlike the pay increase—which will not take effect for three more months—the price hike went into effect immediately. Select sizes and products have been marked up 10 to 30 cents, raising the average customer ticket by an estimated one percent.

The price change comes as little surprise to industry and market insiders. The Seattle-based coffee chain has raised prices in July of each of the last two years. While the increase may not seem all that significant, those who rely on Starbucks for their daily caffeine fix could feel the cumulative effect of such a change rather quickly, as 30 cents per day equates to almost $110 per year.

Planning for the Future

Owning a business is a balancing act. You are constantly looking for ways to keep your customers returning while maintaining a solid, positive relationship with your staff. If you are struggling to meet either of these objectives, an experienced Naperville business law attorney can help. Call The Gierach Law Firm today to discuss your company’s needs and let us provide the assistance you need to help your business continue to grow.



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