Starbucks Is Getting More Expensive, But Can It Afford Pay Hikes?

Starbucks SBUX +2.07% is bringing a major pay raise for its employees this fall. The world’s largest coffee chain has announced to give its store managers and employees in the U.S. a pay boost. While this would work in building morale at the stores and improve efficiency, it could dent the company’s profitability numbers in the quarters ahead.

In a letter commissioned by CEO and Chairman Howard Schultz, the company announced all store managers and retail employees that it dubs as partners would be receiving compensation boosts of at least 5%.

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