Starbucks struggles as same-store sales decline for fourth quarter

In the United States, Starbucks has reported a decline in same-store sales for the fourth consecutive quarter in its fiscal first quarter, marking a significant downturn in its business performance. The coffee giant's same-store sales fell by 4%, primarily due to a 6% decline in customer traffic to its cafes. Despite the gloomy sales figures, Starbucks presented better-than-expected quarterly earnings and revenue, which gave a slight boost to investor confidence. CEO Brian Niccol, who took charge in September, commented on the efforts made to revive the U.S. market, focusing on customer experience and coffee quality. Over the past year, Starbucks has had to navigate declining sales amid increasing competition. The company is implementing a turnaround plan that aims to rejuvenate its core business by refocusing on coffee and improving overall customer service. Measures taken include eliminating charges for non-dairy milk options, streamlining the menu, and prioritizing a community coffeehouse image in its marketing. These adjustments are expected to lessen reliance on discounts as a means of attracting customers and enhance value demonstration. The international performance has mirrored the trends observed in the U.S., with same-store sales outside of its home market also showing a 4% decline. Specific to China, sales fell by 6%, attributed to lower average ticket prices, as Starbucks has faced stiff competition from rivals like Luckin Coffee, known for its aggressive pricing strategies. Starbucks has acknowledged the challenges ahead as it continues to optimize store operations to reduce waiting times, enhance customer interactions, and reconnect with loyal clientele. The leadership changes, including the hiring of former Taco Bell executives, are part of a broader reorganization aimed at better aligning with Starbucks’ identity and overall strategic goals for recovery.