Customers Fed Up With Starbucks: 'You Want HOW MUCH for a Cup of Coffee???'
May 1, 2024 18:02:45 #
STEPHEN GREEN ~ MAY 01, 2024
Inflation has finally caught up to millions of people's morning routine — that half-double decaffeinated half-caf frappuccino with a twist of lemon concoction from their corner Starbucks.
Financial analysis firm The Kobeissi Letter looked at the Seattle-based purveyor of caffeinated treats (I hesitate to use the word "coffee") and found themselves asking, "What happened to Starbucks?"
Second-quarter results are now coming out, and Starbucks reported that "North America and U.S. comparable store sales declined 3%, driven by a 7% decline in comparable t***sactions." the company reported. The average ticket was slightly higher — but stick a pin in that thought because I'll come back to it in a moment.
Things were even worse in China, where "same-store sales plunged 11% with an 8% decline in the average order." China is Starbucks' second-largest market by sales volume after the U.S.
Starbucks shares were down as much as 15% today on the news.
Perhaps most ominously, company-wide same-store sales fell 4% and traffic fell 6% this quarter. If the number of people walking into Starbucks fell 6% but sales were down just 4%, that indicates that it's the most price-sensitive customers who are bailing.
As my old Twitter/X acquaintance, Liberty Belle posted, "$8-9 for a single large beverage is absurd. When the cost of living is high all around, overpriced coffee gets cut."
And will they come back, after tasting something cheaper and perhaps better?
"Even the company's most loyal customers are looking for discounts," Kobeissi reported, which tells me that, one way or another, Starbucks' bottom line will continue to suffer.
Every coffee drinker has their own thing. For some folks, it's wh**ever is in that giant urn that's been sitting there forever in the company breakroom. For others, it isn't even coffee unless it's brewed — I'll come back to how in a moment — from ethically single-sourced beans from a particular hill in Guatemala, hand-picked by the fully indigenous descendants of Juan Valdez receiving Fair Trade wages and air-shipped overnight to the United States on electric planes.
If I'm being honest, I'm a rung or two below a coffee snob. PJ Media's own Paula Bolyard is one of those people who believe that the very best cups from her beloved French press — ask her for details, not me! — while even die-harder aficionados swear by the pour-over method.
I'm somewhere in between. I need something tastier than the ancient office urn stuff I started on, but I don't have the patience to go through the rigmarole that a French press or a pour-over requires. So I settled a few years back on Illy's Intenso Dark Roast Iperespresso capsules. They combine the ease of a K-Cup but with big Italian flavor.
Mostly, when I need my morning hit, I need it right away and I need it strong.
But wh**ever your thing is, there comes a time when the sticker shock on a Salted Caramel Cream Cold Brew with Cinnamon Dulce Sprinkles and a shot of Peppermint Syrup is going to have people saying, "Maybe I'll just grab something at Dunkin'."
You have to give Starbucks credit for somehow turning cheap coffee into a luxury good. But after three years of most people's wages shrinking and no end to inflation in sight, those high prices could prove to be the company's Achilles' heel.
Starbucks' overpriced chickens — ethically sourced, of course — may finally be coming home to brewst.
I'll show myself out.
Inflation has finally caught up to millions of people's morning routine — that half-double decaffeinated half-caf frappuccino with a twist of lemon concoction from their corner Starbucks.
Financial analysis firm The Kobeissi Letter looked at the Seattle-based purveyor of caffeinated treats (I hesitate to use the word "coffee") and found themselves asking, "What happened to Starbucks?"
Second-quarter results are now coming out, and Starbucks reported that "North America and U.S. comparable store sales declined 3%, driven by a 7% decline in comparable t***sactions." the company reported. The average ticket was slightly higher — but stick a pin in that thought because I'll come back to it in a moment.
Things were even worse in China, where "same-store sales plunged 11% with an 8% decline in the average order." China is Starbucks' second-largest market by sales volume after the U.S.
Starbucks shares were down as much as 15% today on the news.
Perhaps most ominously, company-wide same-store sales fell 4% and traffic fell 6% this quarter. If the number of people walking into Starbucks fell 6% but sales were down just 4%, that indicates that it's the most price-sensitive customers who are bailing.
As my old Twitter/X acquaintance, Liberty Belle posted, "$8-9 for a single large beverage is absurd. When the cost of living is high all around, overpriced coffee gets cut."
And will they come back, after tasting something cheaper and perhaps better?
"Even the company's most loyal customers are looking for discounts," Kobeissi reported, which tells me that, one way or another, Starbucks' bottom line will continue to suffer.
Every coffee drinker has their own thing. For some folks, it's wh**ever is in that giant urn that's been sitting there forever in the company breakroom. For others, it isn't even coffee unless it's brewed — I'll come back to how in a moment — from ethically single-sourced beans from a particular hill in Guatemala, hand-picked by the fully indigenous descendants of Juan Valdez receiving Fair Trade wages and air-shipped overnight to the United States on electric planes.
If I'm being honest, I'm a rung or two below a coffee snob. PJ Media's own Paula Bolyard is one of those people who believe that the very best cups from her beloved French press — ask her for details, not me! — while even die-harder aficionados swear by the pour-over method.
I'm somewhere in between. I need something tastier than the ancient office urn stuff I started on, but I don't have the patience to go through the rigmarole that a French press or a pour-over requires. So I settled a few years back on Illy's Intenso Dark Roast Iperespresso capsules. They combine the ease of a K-Cup but with big Italian flavor.
Mostly, when I need my morning hit, I need it right away and I need it strong.
But wh**ever your thing is, there comes a time when the sticker shock on a Salted Caramel Cream Cold Brew with Cinnamon Dulce Sprinkles and a shot of Peppermint Syrup is going to have people saying, "Maybe I'll just grab something at Dunkin'."
You have to give Starbucks credit for somehow turning cheap coffee into a luxury good. But after three years of most people's wages shrinking and no end to inflation in sight, those high prices could prove to be the company's Achilles' heel.
Starbucks' overpriced chickens — ethically sourced, of course — may finally be coming home to brewst.
I'll show myself out.
May 1, 2024 18:32:46 #
It’s so expensive and it not right that they charge so much says the 20-35 year old crowd as they buy one every day.
It never occurs to them to DENY THEMSELVES a overpriced desert drink called coffee.
It never occurs to them to DENY THEMSELVES a overpriced desert drink called coffee.
May 1, 2024 21:28:45 #
Steven smith wrote:
It’s so expensive and it not right that they charge so much says the 20-35 year old crowd as they buy one every day.
It never occurs to them to DENY THEMSELVES a overpriced desert drink called coffee.
It never occurs to them to DENY THEMSELVES a overpriced desert drink called coffee.
I understand that many Starbucks outlets have begun serving alcoholic drinks, because they can't find anyone willing to pay six bucks for a cup of coffee if they're sober.
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