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Andrew Buckley, a self-described “mocha guy”, recently swore off his Starbucks habit, reeling after the firm’s latest price increase sent the cost of his drink above $6.<\/p>\n
The 50-year-old, who works in tech sales in Idaho, had been a loyal customer for decades, treasuring his near-daily venti mocha as a little luxury that allowed him to stretch his legs during the work day. <\/p>\n
But the company’s latest price increase crossed a line. <\/p>\n
“It was the straw that broke the camel’s back on my feelings of inflation in general. It’s like, ‘That’s it. I can’t do it anymore,'” says Mr Buckley, who rang up customer service with complaints before heading to social media to vent. <\/p>\n
“I just lost it,” he said. “I don’t plan to be back either.”<\/p>\n
The decision was a sign of the bigger troubles brewing at Starbucks, which is hitting new resistance from inflation-weary customers just as fights over unionisation and protests against the company cast as a way to oppose Israel’s war in Gaza are sparking boycott calls and tarnishing the brand.<\/p>\n<\/div>\n\n\n
Andrew Buckley<\/span><\/div>\n<\/div>\nAndrew Buckley now brews coffee at home or goes to The Human Bean, a smaller chain<\/figcaption><\/p>\n<\/figure>\n\n
Sales at the company slumped 1.8% year-on-year globally at the start of 2024.<\/p>\n
In the US – by far the firm’s biggest and most important market – sales at stores open at least a year dropped 3% – the biggest fall in years outside the pandemic and Great Recession.<\/p>\n
Among those jumping ship were some of the firm’s most committed customers – rewards members, whose active numbers marked a rare 4% fall compared with the prior quarter.<\/p>\n
Former regular David White says he has stopped nearly all of his purchases with Starbucks in recent months, at times abandoning orders mid-purchase, aghast at the totals in his cart.<\/p>\n
He says his outrage over price hikes has been bolstered by other company decisions, including its crackdown on workers seeking to unionise.<\/p>\n
“They’ve gotten too full of themselves,” the 65-year-old from Wisconsin says. “They’re trying to squeeze their day-to-day customers too much and profit via their employees and prices.”<\/p>\n
For Andrew Buckley, the decision to quit the firm was down to prices, but he notes that the various noise surrounding the firm on political issues has left a bad taste in his mouth.<\/p>\n
“This is a coffee shop. They serve coffee,” he says. “I don’t want to see them in the news.”<\/p>\n<\/div>\n
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On a conference call to discuss the firm’s latest results, Starbucks chief executive Laxman Narasimhan said sales had been disappointing, citing in part more cautious customers, while acknowledging that “recent misinformation” had weighed on sales, especially in the Middle East.<\/p>\n
He defended the brand and vowed to bring back business with new menu items such as boba drinks and an egg sandwich with pesto, speedier service in stores, and a flurry of promotions.<\/p>\n
Chief financial officer Rachel Ruggeri said this week that the company was seeing signs of revival, noting growth in active rewards members. <\/p>\n
The firm does not intend to back away from its expansion plans, but she warned investors that the challenges would not quickly disappear.<\/p>\n
“We do believe it’s going to take some time,” she said.<\/p>\n<\/div>\n\n\n
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Friends Veronica (left) and Maria Giorgia (right) say they have noticed an increasingly corporate vibe at Starbucks<\/figcaption><\/p>\n<\/figure>\n\n
The firm’s struggles have stirred debate about whether they are a canary-in-the-coal-mine kind of warning that the go-lucky consumer spending that has powered the world’s largest economy in recent years might be abruptly losing steam. <\/p>\n
Like Starbucks, a slew of other big fast-food brands, including McDonald’s, Wendy’s and Burger King, have reported softening sales, announcing discount sprees to try to revive enthusiasm.<\/p>\n
But many analysts believe Starbucks’ sales drop reveals more about the company than the wider economy.<\/p>\n
“When you look back and you see the magnitude of the shift… that occurred in such a short time, that doesn’t usually point to something that’s macro in nature or price point-related in nature,” says Sharon Zackfia, head of consumer at investment management firm William Blair, who raised concern in a note to clients last month that the brand might be losing its lustre. <\/p>\n<\/div>\n\n