Why Starbucks Is Struggling

Starbucks reported a global same-store sales decline of 3% and missed revenue expectations by $130 million in its fiscal third-quarter earnings on July 30, 2024. Its share price has tumbled nearly 25% in the past year. That's all due to operating challenges, an increasingly price conscious consumer and boycotts related to the Israel-Hamas war. Still, the coffee giant accounted for more than 25% of the U.S. coffee and snack shop market in 2023.

Chapters:
0:00 Introduction
1:25 Chapter 1: Challenges
4:00 Chapter 2: Value wars
7:40 Chapter 3: Unions and boycotts
9:30 Chapter 4: Fixing its problems

Produced and Edited by: Ryan Baker
Camera and Audio by: Natalie Rice, Cary Patton, Steven Bechtold
Animation: Christina Locopo, Emily Rabbideau
Senior Managing Producer: Tala Hadavi
Field Producer: Kevin Schmidt
Additional Footage: Getty Images

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Why Starbucks Is Struggling

[mikewolf-xt]

30 years ago, going into a starbucks was like walking into someones living room. Book on the wall, plush chairs and couches, nice lighting and carpet. Now, its a burger king

[matthew]

I love how they're talking about "connection with the barista" when we literally just don't think an iced latte with oat milk is worth $9.20.

[memonos]

1- the boycott obviously
2- overpriced
3- tastes like absolute garbage
Local coffee shops are so much better than those places

[reideen-werejusttalking.]

These corporations don't understand that we just cannot pay that much for coffee. It's not hard to understand. Our wages are low, their growth is even lower so don't expect us to spend money on anything that's not an absolute necessity. Corporation greed really has no boundaries.

[SphealIcecream]

Too pricy. I’d rather support local businesses

[nickdehnel]

1. Over priced
2. Coffee tastes burnt
3. Most drinks are now a boat load of sugar and synthetic flavour

[MainUkraine]

I worked for Starbucks and realized they're not in the business of selling coffee, they sell sugar. I felt guilty when I had to pump 30 pumps of syrup into someone's drink.

[chrismuffin]

Companies will do everything but drop their prices 🙄

[Digitalknifeparty]

I haven’t bought any Starbucks in 91 days. I saved over 614 dollars as a result.

[AlexRocks-]

I used to go to Starbucks then I woke up and started supporting the local coffeeshops. Never looked back.

[joelink]

I don’t mind waiting an extra 5 -10 minute for a quality cup of coffee. Wait time isn’t the issue. A latte with a milk substitute costing $9 is the problem.

[Karollavine]

Starbucks is so expensive especially for our generation who is so poor

[amanda.c.ice.]

I worked at Starbucks for 2 years. The reason it would take us so long to make drinks is that Starbucks would keep coming out with new, intricate drinks every other week and we would have to remember how to make a million different drink combos, each with 8+ ingredients. It was ridiculous!!! Pair that with staff shortages and it was awful to keep up with all the incoming mobile orders and drive through orders at one time.

[nicole_a_]

Starbucks is crap. Make coffee at home, it tastes better, it's healthier, and costs next to nothing in comparison.

[BasicallyMindy]

Going to Starbucks used to be fun. Pre-Covid it was “hey wanna go to Starbucks and chat for a few hours” now they started taking out seating, it’s loud and everyone is in a hurry. It’s not fun anymore.

[greenteayk]

Gave up starbucks when they expire my stars when I don't go often ... Thanks for that move! I have saved so much.

[SkoobyShnacks]

No one wants to spend $10 on coffee and then get bugged to ask for a tip just because they pour coffee and hand you a cup….not worth it. I can make my own, and better, thanks

[lqfm]

“Not able to communicate the value that we provide”. CEO verbiage for we charge too much for an inferior product compared to what local coffee shops offer.

[cesarher]

Unlimited growth is not sustainable. Shareholders thirst for profits are killing businesses

[ReneeOfTheFae]

As a 9+ year barista, I can tell you right now that Starbucks is long past it's Golden Era. I drank the Kool-Aid for the first couple years I worked there. Then, Howard left. Then the Philly incident happened (where the racist manager called the cops on two black men waiting for their friend before they were going to order and hang out at the store), so, Howard came back to try to fix that mess. Then he left again, and ever after, we've had CEOs that have been dismantling the "Third Place" feeling Howard worked so hard to curate. Then, "partners" decided they'd had enough and starting unionizing (good for them! We definitely get treated differently than corporate would have the general public believe...) Now, we are literally just fast food with upper management micro-managing and breathing down store managers' (and below) necks to decrease our drive-through times and upsell to increase the "ticket totals, " but still "connecting with customers" all while they reduce the amount of hours our managers are allowed to staff in each store, effectively making every store insanely understaffed at Peak Times but overstaffed in the quiet dayparts. If managers and shifts were allowed to make staffing calls like they were once trusted to do, Starbucks would see better profits, more connections, and quicker turnaround times, but all they focus on are the algorithms that get applied blindly across the board. It might make sense for your in-state/in-Seattle stores, Corporate, but it doesn't work for stores who know their areas, local goings-on, and business patterns better than your algorithms.
TD;DR: Starbucks trusts their algorithms more than their employees, and only care about drive-through times and per-ticket income.