2024-05-03 02:36:09
Starbucks‘ sales recently turned out worse than expected. Even the stock collapsed. The reason is surprising: too many customers.
The popular coffee house chain Starbucks has to cope with a significant drop in its share price and a noticeable decline in sales. In the second quarter of 2024, the company recorded sales of 8.6 billion US dollars (around 8.38 billion euros) – experts had actually estimated quarterly sales at 9.12 billion US dollars (around 8.5 billion euros). “Business Insider” reports.
One reason for the lower sales: Starbucks customers no longer come to the branches throughout the day. In fact, it is primarily during rush hour that business is backed up, as Starbucks CEO Laxman Narasimhan confirmed. Barista and cashiers simply can’t keep up. That puts pressure on the numbers.
Stock value drops due to excessive demand during rush hour
The orders booked through the Starbucks app place additional strain on the system. Many users apparently cancel their orders if the expected waiting time is too long or the products are not available. According to analysis, this means that more than one in eight customers who place a mobile order delete at least one menu item that they would actually be interested in, reports Business Insider. This means the company is leaving a lot of money in queues and on hold.
Many investors are concerned about the company’s quarterly report. The result is a crash in Starbucks shares: they lost almost 14 percent of their value within one day. While it cost 82 euros on Tuesday, it was only 70 euros on Wednesday. CEO Narasimhan assured investors that Starbucks is working to improve morning rush hour performance.
Despite the comparatively poor quarterly sales, the company opened 364 new branches in the second quarter, as “Business Insider” reports. Most of the coffee house chain’s new locations are in the USA and China.