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Starbucks in trouble as prices and boycotts affect its sales

  • Posted on June 9, 2024
  • News

Starbucks faces sales slump as once-loyal customers defect over rising prices and boycott calls sparked by union stance and Mideast controversy, raising concerns about American consumer spending.


Starbucks is facing severe problems as loyal consumers switch to other brands due to high prices and resulting boycott, which has caused a significant decline in coffee company sales.

In the latest quarter, Starbucks faced a 1% drop in sale in the global market. of 8% for the year and a 3% decline in the U. S market – the worst performance outside of the pandemic and the recession. They even diminished by 4% even the people in the rewards program, who are expected to be loyal supporters of the brand.

The price increase and inflation has reached its boiling point for customers like Andrew Buckley who claimed to stop going to Starbucks due to expensive drink prices of more than $6. Some of them like David White have even quit orders halfway through the purchase process due to rising figures and the company’s opposition to workers forming unions.

The sales drop arises at a time when Starbucks is experiencing boycotts based on its legal action against a union over statements of support for Palestine. While not directly boycotted, the firm was caught in the cross hairs of controversy over Israel’s military campaign in Gaza that saw protests and social media campaigns which chief executives admitted affected sales.

While expressing support for the brand, CEO Laxman Narasimhan said it would return to business by adding new products, campaigns and an increase in the rate of service delivery. However, experts have said re-establishing the trust of the customers may be a herculean task akin to the process that took Chipotle several years to overcome following food poisoning scares.

Also Read: Britannia's Q3 Net Profit Plunges by 40%, Sales Inch Up Over 2%

Read in this light, the troubles facing the iconic brand as it battles to regain its footing, prompt consideration of whether the consumer spending that powered the economy could be slowing. Although many analysts attribute it to the specific situation of Starbucks, the company may signal a trend in other American expenditures amid inflation.

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