Written by • 2024-07-31• 1:06 PM• World

‘Starbucks expands ‘1+1 promotion’, global performance in the last quarter also ‘falls behind”

HomeWorld‘Starbucks expands ‘1+1 promotion’, global performance in the last quarter also ‘falls behind”

[‘Starbucks\’ third quarter performance (April to June) has shrunk. It remained sluggish in the United States and China, which account for one-third of global sales. Factors such as wage increases have also had an impact.’,
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[New York=AP/Newsis] On the 16th (local time), workers and supporters are participating in a strike in front of a Starbucks coffee shop in downtown Manhattan, New York, demanding a 'fair schedule and wages'. they entered a strike at more than 200 Starbucks stores in the United States, the union urged the company to engage in negotiations on wage increases and staffing. 2023.11.17.</em></span>, ‘Starbucks reported that its third-quarter revenue for the 2024 fiscal year, announced in the United States on the 30th (local time), decreased by 0.6% compared to the same period last year, totaling $9.1139 billion ($125.853 billion). Operating profit for the same period decreased by 1.8% to $287.5 million. Starbucks explained, “Despite opening 526 new stores worldwide, operating profit margin decreased due to product-related promotions and investments in wages and benefits for store employees.” The Wall Street Journal (WSJ) reported, “Following a 4% decrease in sales in the second quarter (January to March), the third quarter also experienced negative growth for two consecutive quarters.”‘, <br />, <br />, ‘Same-store sales in China plummeted by 14%. The WSJ explained this was due to intensified competition, including local competitors such as Luckin Coffee.’, <br />, <br />, ‘Same-store sales in the United States also dropped by 2%, and operating profit decreased by 7.5%. Order volume decreased by 6%.’, <br />, <br />, ‘Starbucks CEO Kevin Johnson said in a post-performance conference call, “Order volume and sales have improved slightly compared to early this year,” but also mentioned that “the business in China is in a fragile state,” adding, “we are in the early stages of finding strategic partners to accelerate business growth in China.” The WSJ speculated that Starbucks would turn to licensing agreements with local companies rather than direct operation for its business in China.’, <br />, <br />, ‘Regarding the larger decrease in operating profit compared to revenue, the WSJ explained, “Discount promotions on beverages implemented intensively in the third quarter also had an impact.” Starbucks practically offered a 50% discount on prices with the “Frappuccino 1+1” promotion in the United States starting from May. Moreover, more than half of the month was dedicated to promotions such as discounted coffee bean sales, discounted morning sandwich and coffee sets, and 50% off special drinks. The increase in costs for employee wage hikes and benefits also affected profits.’, <br />, <br />, ‘CNBC News mentioned statistics indicating that as food prices rise, Americans are reducing their food expenses, leading to an average decrease in Starbucks visits to once every two weeks, stating that “promotions to bring these people back into the store were actively continued.”‘, <br />, <br />, ‘On this day, the results were announced amid negotiations between management and Elliott Investment Management, an activist investor who purchased Starbucks shares. Elliott demanded management improvements and corporate governance changes to boost stock prices. In response, CEO Kevin Johnson confirmed Elliott’s share purchase and stated, “The conversations we’ve had so far have been constructive,” adding, “we are pushing for operational improvements that are expected to improve financial performance.”‘, ‘article_split’, <br />,…]</p> <div class=Visited 4 times, 1 visit(s) today
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