Seattle
Coffee break: Former Starbucks boss Howard Schultz has urged the current management to spend more time in the coffee chain’s stores, says Max Zahn on ABC News. The shares have plunged 17% since the company revealed a slump in sales last week. Starbucks is often viewed as a bellwether for US consumer spending, which accounts for nearly three-quarters of economic activity. Certainly, sector peers McDonald’s and Yum Brands, which owns KFC and Pizza Hut, have reported a similar slowdown recently. Consumers are contending with “stubborn inflation and a spike in credit card debt”.
But Starbucks also isn’t doing itself any favours. The company has failed to “sustain a surge in demand” during the pandemic by adapting to the new environment. Starbucks could afford to charge a bit more then; less so now. A dispute with the labour union Workers United centred on the Israel-Hamas war, and a resulting consumer boycott, also hasn’t helped. Really, it boils down to waiting times, says Lex in the Financial Times. There are
