Starbucks is one of the largest coffee chains in the world. However, in recent months, the company has been forced to take serious measures due to financial difficulties and increased competition in the market. According to Starbucks management, nearly 400 stores in North America alone will close their doors by the end of the month. In this process, about 900 employees are expected to become unemployed. This was reported by Bloomberg.
According to the company, this direction is being implemented in order to reduce costs and effectively distribute available resources. Starbucks executives hope this will prevent customers from standing in long queues and increase sales at the most profitable points.
Starbucks made a similar decision in February. At that time, the company announced a reduction in 1,100 jobs and a simplified menu in the US following a decline in sales. This means that in just one year, the industry was forced to give up a total of 2,000 jobs in its country.
The company's CEO, Brian Niccol, stated that the new cuts will be implemented not only in America but also in Europe. In particular, some coffee shops in Britain, Switzerland, and Austria will be closed. However, against this backdrop, the company did not abandon its plans to open new retail outlets in the next fiscal year. For example, 80 coffee shops are expected to be launched in Britain itself, and another 150 in Europe, the Middle East, and Africa.
Nevertheless, negative indicators in the financial statements also affected the company's shares. Since the beginning of the year, Starbucks' securities have depreciated by 8%.
Independent analysts cite a number of factors as reasons for this situation. For example, TD Cowen experts emphasize that "drive-through" stores, which are becoming increasingly popular in the USA - stores that allow you to buy coffee without getting off the car - have become a serious competitor for Starbucks.
According to the survey results, more than 70 percent of customers indicated that they reduced their visits to Starbucks cafes due to high prices. This means that the industry faces not only internal planning, but also large-scale tasks such as pricing policy and maintaining customer trust.
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