Shrinking Starbucks

Been to Starbucks lately? For a company that helped put Seattle on the global map, the coffee giant sure receives a lot of criticism, whether it’s about product quality, wait times, or founder Howard Schultz’s bungling during his time as owner of the Sonics.

Now comes a brutal report that indicates just how far the one-time darling of Seattle has fallen and what it needs to do to regain customer trust.

In the U.S. alone, transactions at stores open at least a year plunged 10% in the last quarter, while sales fell 6%. In China (where Starbucks has an outsized presence), sales plummeted 14%. Company executives cited a “pronounced traffic decline” and admitted that investments in new products and in-app promotions did not work.

New Starbucks CEO Brian Niccol — who has been at the company for less than two months — has already outlined plans to put the company on track to regain its swagger, including returning to its roots as a community coffee house and gathering place, reducing wait times and improving customer service. If his tenures leading Taco Bell and Chipotle are any indication (profits rose nearly seven-fold during his six years at the latter), he’s definitely the right person for the job. He’s clearly got his work cut out for him.

I know several fanatically loyal Sonics fans who’ve refused to set foot inside a Starbucks ever since the team decamped to Oklahoma City shortly after Schultz’s controversial five-year stint as owner. I’m not in that camp, and I’m not a coffee connoisseur to begin with, but some of the enmity toward the company over the years — for whatever reason — always struck me as odd, and perhaps misplaced. 

Is the coffee overpriced? Maybe. Are there neighborhood-focused coffee shops that do it better? Probably. I have noticed significant differences in the quality of Starbucks coffee over the years depending on the location of the store. As a global chain, that’s clearly a problem.

Intense scrutiny will always come when you’re the world’s largest coffee chain. I wonder what the conversation will be, say, two years from now. The company is in for a rocket ride.