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.
Ditto.I am not complaining about my Italian espresso maker giving up the ghost..
Best coffee beans I ever tried were from Uganda.
ladyjane wrote: “If you like chicken salad sandwiches Costco has canned chicken that makes great chicken salad. It’s fairly cheap when it goes on sale - certainly cheaper than restaurants or fast food places.”
Thanks for that information. We keep both the canned chicken and the canned tuna on hand. Sometimes you just want to be served instead of making your own.
ladyjane wrote: “When we go on trips we take chicken salad sandwiches using Costo’s canned chicken. We put them in a cooler with bottles of water (or soda) and separate lettuce that we put on the sandwich when we eat them. We also bring a few carrots and celery or snap peas. It costs practically nothing, tastes great and it’s safer.”
We used to pack our lunches for our road trips too. Only we would take summer sausages and cheese, those just cracker sized. One would drive and one would make small sandwiches.
ladyjane wrote: “When we’re home and it’s been a very busy day our local grocery store has take-out bistro meals that are half the price of take-out and you don’t have to pay a tip to a distracted kid who just hands you your food. I see some people buying multiple ready to eat meals. They much cheaper and have less salt than the drive-thru places.”
Publix has some great ready to cook meals that we like.
citing long wait times and product unavailability
Now if you’re wanting a pastry with your coffee and the app says they don’t have any, then yes I can see customers not completing the order.
For my birthday, my daughter got me a coffee hot plate. I work from home & I love it. Hate warm or cold coffee.
Thinking some people are so stupid they can’t figure out how to make coffee at home.
People are tired of overpriced coffee with weird names and variations, and that they force customers to actually speak a in special coded Starbucks language to make a simple order. Also their coffee tastes a little earthy… like dirt.
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