falling sales, falling inventories and dramatic changes in 2024
The symbol of urban modernity’s shares are plummeting and it is revising its forecasts for this year downward.
The iconic coffee chain, synonymous with modernity, is facing a period of uncertainty. The latest financial results and downward revisions to 2024 forecasts leave Starbucks in a fragile position, with shares down more than 10% in recent days.
Store visits and sales are down around the world, but especially in important markets like the US and China, they are testing a company that in recent decades saw the pandemic only as a serious problem. And it was essentially temporary.
Because it’s important. How Starbucks handles declining sales is a test of both its operational efficiency and brand perception. And it could determine your future in an increasingly competitive and volatile global market.
Quantity. The sales decline in the first quarter of 2024 compared to the same period last year was 1.9%. That doesn’t seem like much, but Starbucks acknowledged that sales forecasts for the rest of the year would continue to decline and they had to cut their forecasts.
The arrow stopped at $8.563 million. Starbucks is expected to earn $9.13 billion. Wall Street Journal.
The decline was not uniform across all markets. In the US, store traffic fell 7% and sales fell 3%, the publication reported. CNBC. In China, Starbucks’ second-largest market, declines were 11% and 8%, respectively. Increase ticket the average was not enough to compensate for the lower number of customers.
Strategy. Starbucks is already experimenting with formulas to green its mermaid’s laurels. For example, it is expanding its menu, innovating in drinks and increasing its food offerings to expand its clientele. They are also looking for operational improvements to reduce wait times and improve product availability.
The same goes for the evening and night approach. On the one hand, attract customers throughout the day, and not just concentrate in the early morning and afternoon hours. On the other hand, to capture the night demand. Even sending coffee to your home. In the past, he regularly engaged in late-night activities, including alcohol on his menu.
Clients at two speeds. The company said the popularity of its loyalty program allowed it to find that its most loyal customers remained highly loyal, but casual shoppers were visiting its stores less often than before. There is one more point on which you should act.
In Hatak | I don’t like coffee, but after reading what science says, I started drinking it daily.
Featured Image | Xataka with Midjourney