Title: Why Starbucks is suddenly struggling
Headings: Why Starbucks is suddenly struggling
Why Starbucks is suddenly struggling
It has too many locations
There’s too much competition
Retail problems
Technology is no savior
Higher costs
Bad public relations
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Content: Higher costs
Earlier this month, we wrote about Starbucks’ price increases, and I said they were not necessarily a good idea for a chain struggling with weak traffic. But it’s easy to see why the company has raised those prices. It has to, with labor costs going up, especially in the chain’s more urban markets. Again, price increases tend to drive away less loyal traffic the most, and that’s been Starbucks’ biggest problem. Bad public relations
I don’t think it’s much of a coincidence that Starbucks’ same-store sales are slowing further in a quarter in which the chain had to close 8,000 locations for diversity training after a manager called police on a pair of African-Americans waiting for someone. Even without that incident, Starbucks has become something of a lightning rod. Conservatives don’t like it because the chain’s founder, Howard Schultz, is apparently a Democrat. Liberals don’t like Starbucks because it is a big corporation. Oddly, both groups load my Twitter notifications with criticisms of the chain and stories of how they make their own coffee at home. To be sure, that comes with the territory when a chain grows that large.