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.
It would be a good time for talking and caressing, while you make the cappuchinos. I see your wisdom.
It would be a good time for talking and caressing, while you make the cappuchinos. I see your wisdom.
People aren’t willing to pay $8 for coffee they can make at home. I used to make my daughter coffee at home before school every day with the syrup and all, special go cup with a lid, just as yum if not better than Starbucks.
Welcome to America!
Try Ethiopian Coffee, Yirgacheffe. I grind my own beans. Best cup of coffee.
I observe it's the sugar they are after.
I think ever since 7-Eleven decided to substantially “up” their coffee quality, it has really put a major hurt on Starbucks. I can now get a large size coffee at 7-Eleven for just over US$2 and put in my own sugar and various creamer types.
I had a semi expensive Italian espresso maker that quit on me some time ago. I replaced it with a $100 Krups espresso maker. That is probably considered an act of blasphemy for espresso aficionados...
I count cost/use. As long as you made enough cappuchinos to have gotten your money back, it’s all good.
What? You can actually do that????
It is a strange thing when people will spend 6 dollars for a cup of sub-par coffee made by people hostile to you, who would likely spit in your coffee if they knew who you were, rather than spend the 2 minutes to do it themselves.
I don’t get it either.
“Then take the over $1,000/year saved and treat yourself to something.”
I did exactly that. Over a one year experiment, I used my Kuerig and started making my coffee at home (buying the bogo k-cups at Publix). I then took the cash I usually used for my daily cappuccinos (yes...plural and daily) and stuck it in a jar. At the end of the year, I paid cash for a Breville Barista Touch espresso maker, and buy local beans for GREAT coffee.
Industrial processed potatoes mashed up with some industrial cheese and chives, that's what a multi-million-dollar franchised industrial syrupy-sweet coffee joint is banking on?
That pitcha tell a story right there.
Not only that, he thinks kombucha will save Starbucks.......................
Over priced, over roasted...bitter coffee.
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.
On a related note, if you're not using the apps at fast food places, you're throwing money away.
I use my dive-thru code and order from the kiosk at McD's. Almost every time I visit, I get something for free with a purchase.
I've stopped ordering combo meals. I'll buy a burger, get a small fry for free, and take it home where I'll have a can of soda to drink.
For a 2 week period, I monitored coffee sales at a local grocery store.
Shelf items were purchased in large numbers, every day.
The volume was so great, that a typical customer would suspect that the shelf was not being stocked.
When in fact, the shelf would always end up about 30% full - meaning the restocking supply in general, would be close to “completely wiped out.” And, totally “wiped out” for the most popular brand/kind of coffee.
I learned that people who drink coffee, will drink almost any kind of coffee in the morning - “it is a must have.”
Folgers is the most popular. Maxwell House is the [meager] backup. Several “custom bags” with higher prices - these do not have a shelf, volume problem.
Folgers Columbian seemed to be the most preferred.
Caffinated is desired more than de-Caff, by almost 3:1 ratio.
makes me want to download their mobile app and put stuff in my cart, then cancel it.
Maybe folks have come to the conclusion overly expensive ashtray juice served by woketards has become passé
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.