Starbucks customers no longer want to wait 20 minutes to get a coffee
Starbucks has had a disastrous start to the year – with tens of millions of customers heading instead to rivals or staying at home.
Tim Horton’s, McDonald’s and Dunkin Donuts have all taken market share from Starbucks across hot and cold drinks, and food.
The company this week reported a fall in sales for the first time in nearly three years, which was at the height of the pandemic. It was only in November it reported record takings.
Multiple factors are to blame – including high prices, customers cutting spending and bad weather – but slow service was highighted by the Starbucks CEO.
Starbucks’ growth has come on the back of complicated and customisable drinks like Frappuccinos in the summer or pumpkin spice lattes in the fall – but each can take baristas several minutes to make.
Starbucks, in the first three months of the year, has lost millions of customers
Statbucks CEO Laxman Narasimhan said slow service was putting off custome
Starbucks customers are ditching orders whlie in the line – as they take too long
Starbucks – which has about 17,000 stores in North America – also warned investors on Tusday it would continue to see slow sales in the spring and summer.
A raft of factors have been blamed for the unexpected slowdown in sales have been highlighted since – by stock analysts, CNBC’s Jim Cramer and the company itself.
These also include boycotts of the brand linked Israel and competition from rivals.
On slow service, the company said it has seen millions of examples of customers ordering items but then abandoning their drinks since they took took long.
‘We have customers coming to our stores today, or on mobile order pay, who don’t fulill their transaction because of wait times,’ CEO Laxman Narasimhan said in an interview with CNBC’s Jim Cramer this morning.
‘Our team in the US has done a phenomenal job in improving speed of service but we see more opportunities in doing that.’
Customers have complained about the waits on social media. On TikTok, mikeylorenz0 complained he for a black coffee he has to ‘wait 20 minutes’ while others order a ‘venti iced grande sugar caramel marshmallow ugat’.
He called for an express line for people who just want basic drinks like a black coffee or a latte without modifications.
Starbucks shares hit a two year low after the company’s dire first quarter earnings were released on Wednesday evening. Narasimhan went on CNBC to defend the company, but was slammed by Cramer.
The CEO told CNBC the quarter was also bad due to bad weather in the US and slow demand in China, its second biggest market.
Price hikes at cafes and restaurants last year have forced customers to ditch them and instead drink more coffee or eat lunch at home, hurting business for chains such as Starbucks.
But rivals like Tim Horton’s, McDonald’s and Dunkin Donuts were not facing the same problems, CNBC’s Jim Cramer said.
On TikTok, mikeylorenz0 complained that for a black coffee he has to ‘wait 20 minutes’ while others order a ‘venti iced grande sugar caramel marshmallow ugat’. He called for an express line for people who just want basic drinks like a black coffee or a latte without modifications.
Starbucks in Atlanta, Georgia, with long line of cars at the drive thru
All three have recently said that they are taking market share from Starbucks.
Talking to investors on a post earnings call on Wednesday, Narasimhan expaned on the reasons for poor sales.
‘Many customers are being more exacting about where and how they choose to spend their money, particularly with stimulus savings mostly spent,’ he said.
‘We saw this materialize over the quarter as customers made the trade-offs between food away from home and food at home.’
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