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Comment by houseatrielah | Hacker News Reader

The margins are so good on coffee (its a morning ritual, its a drug, and so on), and yet the employees are still driven to unionize -- why? Is it because all profits accrue to shareholders? Are there other reasonable explanations?

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There is no amount of money that you could give a billionaire to make them want to pay their employees more.

There is no cap on wealth, nothing is ever enough for them. Aside from external forces they'd hire as few people as possible and as cheaply as possible

> Is it because all profits accrue to shareholders?

Yeah.

I’d not be surprised if most profits end up going to captured rents. Always raise rents until just about when Starbucks would leave.

If it goes to rent, it's not profit by definition. That's just a cost, same as any other. Starbucks made 32B in 2022 with a profit of almost 22B.

I wouldn't doubt that Starbucks is paying rent to Starbucks, and that is a tax evasion scam

Nope, almost all Starbucks locations (like most restaurants and retail establishments) are leased from commercial real estate holding companies and investors.

That 22B is gross profit and highly misleading in this context, since it excludes fixed costs like rents and salaries and also taxes.

Net profit was 3.3B in 2022.

Net profit was $1 a drink or so, apparently.

The margins are not good on coffee. The margin are good for starbucks because of the brand and the franchise. There are almost no regulatory capture in the coffee business. You can go ahead and open your coffeeshop if you think it’s profitable.

Are the margins that good? Sure the cost of the beans and milk is not that much, but the rent, wages, marketing, etc are super expensive.

What relevance are the margins? Baristas don’t see any of that profit. They get paid hourly minimum wage. They work for tips.

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