Starbucks is facing significant challenges in its domestic market as American consumers are increasingly resisting the high prices of its beverages, leading to a decline in U.S. sales. In response, the company is shifting its focus towards international markets, particularly China, where the coffee market is rapidly expanding. Despite the average Chinese person consuming significantly less coffee annually compared to Americans, the number of branded coffee shops in China grew by 58% last year, reaching nearly 50,000 outlets. Meanwhile, Starbucks CEO Laxman Narasimhan announced disappointing Q2 results and revised the company's fiscal 2024 guidance, expecting low single-digit growth in global revenue and a flat to declining performance in U.S. comps. Significant inflation on wages and rising input costs have pressured Starbucks to raise prices to maintain margins. Additionally, there are concerns regarding the complexity of Starbucks' menu.
.@Starbucks' Menu Is Out of Control. We Need to Talk About It. $SBUX https://t.co/A3WoVoR8M8
Is Starbucks even in control of its own destiny? Significant inflation on their largest expense (wages) & rising input costs (coffee, dairy, etc -> needed to raise prices to keep margins flat. Consumers don’t want to pay $7 for a coffee. What are they supposed to do?
$SBUX CEO: "Based on our Q2 performance and ongoing headwinds, we are revising our full year fiscal 2024 guidance. We now expect global revenue growth of low single digits, global and US comps of low single-digit decline to flat..."
STARBUCKS IS RUNNING OUT OF AMERICANS TO DRINK ITS EXPENSIVE COFFEE (WSJ) Pork latte, anyone? To Americans, who still get excited for pumpkin spice season, the beverage Starbucks tested in China recently sounds over the top. But desperate times call for desperate measures, and… https://t.co/1aB5kzRFHV
.@Starbucks Is Running Out of Americans to Drink Its Expensive Coffee - WSJ $SBUX #retail https://t.co/oLu4gJGWhu
What a headline in today's WSJ: "Starbucks Is Running Out of Americans to Drink Its Expensive Coffee" https://t.co/3zDWzOQBJx
BREAKING CEO of Starbucks Laxman Narasimhan shares plunging Q2 results with CNBC, suggesting the successful impact of targeted boycott efforts placing pressure on Starbucks https://t.co/ojGZNCVBQD
"Just last year the number of branded coffee shops in China grew by 58% to almost 50,000 outlets.... That works out to between two and three every hour.... [T]he average Chinese person only drinks 13 cups of coffee a year compared with 380 in the U.S." https://t.co/QOf6uqeIvY https://t.co/NNkPRxrnGP
Starbucks is banking on foreigners, especially in China, to buy a lot more of its drinks https://t.co/yTf4Ctz5IX https://t.co/yTf4Ctz5IX
A GREAT Heard on the Street from @Spencerjakab Starbucks is banking on foreigners, especially in China, to buy a lot more of its drinks https://t.co/oQTyKFuEvg via @WSJ
Americans are balking at expensive Starbucks beverages, but it has an even bigger problem https://t.co/FGeW2OUquk $SBUX