Posted on 05/03/2024 7:03:36 AM PDT by Red Badger
A morning rush is nothing new for a coffee shop, especially not Starbucks. However, the global coffee chain recently found that its struggle to keep up with demand is leading some customers to second-guess purchasing their morning coffee.
Starbucks just announced its financial earnings for the second quarter of 2024. Overall, its leadership was upfront in saying that the second quarter of 2024 was not a successful one for the business as a whole. The chain’s U.S. same-store sales declined 3%, and sales outside of North America decreased 6%.
“Let me be clear,” Starbucks CEO Laxman Narasimhan said on the company’s most recent earnings call. “Our performance this quarter was disappointing and did not meet expectations … these results do not reflect our strengths, our capabilities, or the opportunities ahead.”
Where Starbucks saw some positive points was in its mobile transactions and loyalty program. Narasimhan noted on the call that loyalty program members ordering through the Starbucks app account for more than 60% of the chain’s morning business. However, within that silver lining there is still money being left on the table, as the brand noticed many mobile customers deciding not to actually place their orders after adding them to their cart.
“We saw a mid-teens percent order incompletion rate within the order channel this past quarter,” the CEO said. “In other words, customers using Mobile Order-Pay put items into their carts and sometimes chose not to complete the order, citing long wait times and product unavailability.”
Narasimhan used the example of Starbucks’ Potato, Cheddar & Chive Bakes to illustrate the company’s failure to meet demand. The CEO said the bakes were popular among customers, but Starbucks is currently only able to offer them in 2,000 of its U.S. stores.
How Starbucks is going to win back mobile customers
Although the chain’s Q2 performance did not paint a very pretty picture to its investors, Starbucks’ CEO also presented a plan of action alongside the disappointing sales numbers. To remedy the lack of product availability, Starbucks is investing more into its supply chain and focusing on stocking more of its customer base’s favorite items.
The coffee chain is also rolling out new equipment and making updates to its mobile app frequently. Narasimhan explained these changes are meant to reduce wait times and create more transparency with customers so that they can get a better idea of exactly when their order will be ready.
Starbucks also wants to capture the attention of the less loyal “occasional customers,” who are not signed up for its loyalty program. It plans to do this by offering mobile ordering and pay capabilities to non-loyalty program members starting in July. For now, it looks like Starbucks and its investors will have to wait until next quarter to find out if these changes are enough to win over the caffeine connoisseurs of the early morning.
You can also spike it to help you thru the morning. :)
a starbucks coffee a day... or a million in your retirement fund.
$5 a day, 365 days a year = $1825 per year contributed to your retirement.
assuming 8% return (just doing something safe like S&P or Nasdaq index fund). After doing this for 50 years you would have over 1 million saved for retirement.
That goes without saying, and that's after a little tomato juice and vodka of course.
Never understood the attraction of Starbucks.
Much of the problem is that each such company strives to incorporate the cutting edge crappola into every order. It is early in the morning. Complexity is not good. And, just because your orange-haired “IT tech” says THIS is new and is absolutely needed, you should not.
Back off on complexity. Simplify (your IT tech should be first). YOUR idea of convenience parallels no one else’s.
America runs on Dunkin.
I have rediscovered perked coffee. Vintage Pyrex glass percolator. Great local dark roasted coffees. Even dcream. A grinder. I grind a bag at a time and keep it in two vintage pint canning jars.
I have a pumpedfrother if I want froth. Usually just a touch of good cteam.
Best coffee. Wonderful in front of a cozy morning wood fire. Best aromas ever!
“”””If you buy a high end cappuchino/latte machine at home, you can have it paid for within 6 months by the money you save by not buying starbucks.””””
At the same time having an appliance that makes you look pretty sophisticated and cool to friends and dates, a thinking man can use an appliance like that to impress the ladies.
I think so. Surprising her with an evening latte gives the impression of competence and suave.
“In other words, customers using Mobile Order-Pay put items into their carts and sometimes chose not to complete the order, citing long wait times and product unavailability.”
I do that quite frequently. Have you noticed that many on-line apps require you to initiate an order to see their menu and their prices?
The problem is that some of these college educated dummies are either too lazy or too dumb to brew their coffee at home.
You know.
Getting a woman into your kitchen watching you perform your magic is a pretty sure sign of success for the evening.
Yes, and it infuriates me!.............
Can you imagine going to a grocery store with no prices on the items or the shelves?
You can’t find out how much your grocery bill is until you check out???????????..................
Then you can buy a latte at Starbucks with it..................
I have never bought anything at any Starbucks...............
Red Badger wrote: “Can you imagine going to a grocery store with no prices on the items or the shelves?”
Or having to go to the check out line to fine if an item is even in stock?
Yesterday, I was looking for a place that had chicken salad sanwiches. Go to the website. Enter your zip code. Select delivery or take out or in-store. Then you get to see the menu. No chicken salad. On to next store.
A Starbucks manager told me that the drive-thru was 70% of his business.
70%!
Have a drive-thru or die.
” ordering through the Starbucks app”
Geez, I know starfucks is an airhead fad, but they even use their iFag love toys to buy it?
Hope they do not wonder why they are mocked.
It would be a good time for talking and caressing, while you make the cappuchinos. I see your wisdom.
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