Yes. Absolutely yes. If your workers make more money, they are happier and provide better service. The coffee shop next store will likely have terrible service, with high turnover because everyone there is just waiting for their chance to get out and move onto a better paying job.

Why do you think people shop at stores like Publix or Whole Foods when Walmart has lower prices? Because those stores (even though they still treat their employees--sorry, "associates" poorly) have better service, due to better pay.