Starbucks struggles with rising costs and competition

Starbucks is experiencing rising customer dissatisfaction due to increased prices and longer wait times. A grande drink now costs up to $7.10, up from $6 in 2020.

For the quarter ending June 30, Starbucks reported a 6% drop in US orders, driven by high costs and long wait times, which have surged from an average of 7 minutes to up to 20 minutes.

In China, same-store sales fell 14% during the same period, with local competitor Luckin Coffee outperforming Starbucks. Luckin reported $1.17 billion in sales, while Starbucks generated $734 million.

In response, Starbucks is lowering prices, improving delivery options, and implementing promotions. It also appointed its fourth CEO in two years, Brian Niccol, who has headed Chipotle into success.

Additionally, the company is also exploring strategic partnerships in China to enhance its market presence and address local competition.