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.
Totally agree.
I've been making my own cold brew coffee for the past couple of months. The investment in equipment was quite minimal and I'm enjoying my homemade iced coffee, flavored with different sugar-free syrups I buy at outlet stores.
Are Lattes real coffee , real coffee is extra large and black
Starbucks uses the correct pronouns. That’s the important thing!
Have given up Starbucks due to insomnia and general gut issues with so much coffee. Found some delicious decaf options at my local more alternative grocery. I truly believe Starbucks is rotgut coffee. Don’t even like the taste anymore in those cups .. . yuck.
We had a long thread on the best coffee. We all agreed that it’s wherever you can find it. Could be a from a mom and pop, at work, a machine, gas station, or McD’s. Or any other name brand. Just has to be good, Helps if it’s cheap.
Love my Keurig. One thing I found from using 2 pods is that if I mix two different pods, a Starbucks Tiramisu pod with a cheap brand, it can turn a so so cup of coffee to a good one.
Got a $25 Starbucks gift card that a vendor gave me the Christmas before I retired. Still haven’t used it. I will probably end up giving it to a family member.
Being in a touristy area, we have seasonal layoffs at restaurants every fall. There just isn’t enough customers in the winter (Snowbirds, usually Canadians, cheap anyways) to keep them all open.
Some never re-opened in the Spring................
My Bialetti Moka Pot and Illy ftw.
maybe delivery to the college campus riots?
collectivists need to stick together
and soros can afford it
In my opinion, a strong cup of Folger’s Instant tastes better than Starbuck’s. As I buy it in bulky sizes at places like Costco, I imagine it gets the job done for around $0.09 per cup.
Eventually, I began to notice that the line that was usually there at the drive-thru that I went to, was not there anymore. Eventually, when I arrived at the window and the barrista gave me a total that was a nickel under $6 for a 12 oz. drink, I was done.
They have simply priced out their customers. I was certainly not the only customer that was noticing the serious rise in cost.
I enjoyed my last Mocha from them; and, I have not returned and won't.
Agree. Q codes and apps are not allowed entry into my phone.
And we’’re enjoying the hell out of homemade cappucinos & lattes.
In 20 years I’ve spent under $20 at Starbucks, only because it was a convenient business meeting place. Mrs. spends an X-mas gift card there for some iced specialties. I’ve never understood their phenomenon, probably because I understand thrift and hate wasting $.
I cannot understand the insanity of people rudely rushing around trying to get in line to buy their burnt coyote piss.
Apparently it is no longer stylish to set up an automatic coffee maker at home that has it ready when you get up. People just gotta have that green labeled coffee cup to show off and be in style.
Dummmmmmb.
If you go to any VA Hospital, the coffee shop is Starbucks. But they have no Starbucks logos at all and are named VCS PatriotBrew Coffee Shops. Their prices and stupid names for cup sizes are the same.
I haven’t been to Starbucks since their CEO said they didn’t want the business of anyone against (so-called) “gay marriage”.
May Starbucks rot in hell!
“Why not brew coffee at home for a tenth of the price and pour it into an insulated cup that keeps it warm for a half hour and take it with you. Then take the over $1,000/year saved and treat yourself to something.”
Recently saw a video wherein a guy calculated that the StarFucks coffee his wife bought 5 days a week worked out to a little over $2,000 per year. He presented her with the numbers because she did not believe him at first.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.