Starbucks has declined over the past two quarters in global same-store sales. This comes amid fierce competition, price hikes and consumers losing interest. Consumers have become choosier since the pandemic and the emergence of rivals offering similar products at more affordable prices.
RJ Hottovy, an analyst, said there has been an increase in cost-conscious consumers. “They’re finding other places or just doing things at home,” the expert said. “There’s also more competition from some of the drive-thru coffee chains, like Dutch Bros.”
During a recent earnings call, Starbucks CEO Laxman Narasimhan said the company is recovering its brand form. “We’re rebuilding the operational foundation of our stores and supply chain.” He earlier said that budget-conscious consumers have been more careful about their spending, and severe weather in the US also impacted sales.
“Our three-part action plan is beginning to work and driving operational improvements that we expect to improve financial performance,” Narasimhan said. “Our growing culture of focused innovation and relentless execution continues to enhance our capabilities while helping return the business to sustainable growth.”
Despite Starbucks not meeting its expectations, the executive believes there are challenges and opportunities. “We have a clear plan to execute and the entire organization is mobilized around it.” The coffeehouse chain is working towards reaccelerating growth in its US business. It’s meeting new demand through a relentless focus on improvements in its operations and experience.
Starbucks is launching exciting new products to attract customers.
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