The symbol of urban modernity sees its shares plummet and revises its forecasts for this year downwards
The iconic coffee chain synonymous with modernity is facing a period of uncertainty. The latest financial results and a downward revision of its forecasts for 2024 leave Starbucks in a fragile position, whose stock has fallen more than 10% in recent days.
Visits to stores and sales have decreased globally, but more notably in such critical markets as the United States and China, they are testing a company that in recent decades had only faced the pandemic as a major problem. . And it was inherently temporary.
Because it is important. How Starbucks handles a decline in sales is a test of both its operational efficiency and its brand perception. And it could determine your future in an increasingly competitive and volatile global market.
The amount. The year-on-year sales drop is 1.9% in the first quarter of 2024. It doesn’t seem like much, but Starbucks has admitted that sales forecasts for the rest of the year will continue to go down and they have had to cut their forecasts.
The needle stopped at 8,563 million dollars. Starbucks expected to earn 9.13 billion, according to Wall Street Journal.
The fall was not the same in all markets. In the United States, human traffic in its stores fell 7%, and sales fell 3%, according to publications CNBC. In China, Starbucks’ second largest market, the declines were 11% and 8% respectively. The increase of ticket average was not enough to compensate for the lower number of customers.
The strategy. Starbucks is already experimenting with formulas to green its mermaid’s laurels. For example, it is expanding its menu, both by innovating in drinks and increasing its food offerings to expand its clientele. They are also looking for operational improvements to reduce waiting times and increase product availability.
The same with an evening and night approach. On the one hand, to attract customers throughout the day, and not just concentrated in the early morning and mid-afternoon hours. On the other hand, to capture nighttime demand. Even sending coffee to your home. In the past he had regular nighttime activities, including alcohol in his menu.
Clients at two speeds. As revealed by the company, the popularity of its loyalty program has allowed them to detect that the most regular customers have remained quite loyal, but that the occasional customers have stopped by their stores less frequently than before. There is another point on which to act.
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Featured image | Xataka with Midjourney
