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OGRE's avatar

Starbucks just made their investors look like StarSchmucks.

I think the are a number of things to consider when it comes to the Starbucks sales slump, and you did a fine job of considering them.

Marketing is definitely *not* an issue -- but those in the advertising world will always tell you it is. 😉 👉

I would only like to add that I think the lingering effects of the COVID-19 scare are effecting all places like Starbucks.

For nearly a year, longer in some places, people were not allowed to have their "Third Place" hangout. As a result, they learned to live without it.

Similarly, as costs (for everything save durable goods) skyrocket, novelty sugary coffee drinks will become rather low priority.

Americans for more than half a century have enjoyed some of the lowest food prices in the world. That is, when considering the cost of food, as a percentage of income. That's changing very quickly. People tend to prioritize "roof over head, food in my stomach."

Also consider, Starbucks being overpriced was actually a part of the brand. After all, you can't sell coffee at Dunkin' Dounuts prices, and claim to be upscale. It just doesn't pan out. Starbucks is what it is -- because it is above a price point.

Now it seems that price point is too high for its base customer.

CEOs can promise the world, but they can't put money in their customers pockets and remain profitable.

My prediction is that places like Starbucks will continue to do poorly, until the economy rebounds, which is likely not to happen for a *very* long time.

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Diana M. Wilson's avatar

This is an extraordinarily comprehensive analysis. And very interesting. The work you do always exceeds expectations. Thank you so much.

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