Most companies would want to "struggle" like Starbucks (SBUX). The chain recorded a modest 9% gain in US same-store sales in 2023, with 5% coming from increased average transactions, possibly due to price increases.
It appears the chain is losing some customers. Placer.ai reports lower November customer traffic.
Daily visitors on Red Cup Day increased by 74.4%, 65.0%, and 81.0% in 2020, 2021, and 2022 compared to the five weeks prior.
In 2023, the Red Cup Day visit bump relative to the five-week daily average was 31.7%, still a significant rise but not as high as in previous years.
Red Cup Week, saw 16.1% less visitors than in 2022. According to Placer.ai, visits in the first full week after the seasonal Menu's publication were down 3.4% YoY, suggesting lesser demand for special seasonal beverages.
Inflation, the economy, and competition aren't Starbucks stockholders' worries. All of those factors may contribute, but Starbucks' issue is CEO Laxman Narasimhan.
Though some have criticized Starbucks' longtime CEO Howard Schultz's labor difficulties, his coffee credentials are undisputed. Schultz took over Starbucks, which was roasting and selling beans.
Narasimhan has no coffee experience. That's like Kevin Johnson, a former Microsoft executive who became CEO during Schultz's absence.