E-commerce a nuisance for Starbucks

E-commerce a nuisance for Starbucks

Coffee chain Starbucks has underperformed in its latest quarter, according to analysts. The like-for-like turnover in the chain’s cafés (those that have opened over a year ago) has grown 5 %, while analysts had expected 5.9 %.

 

Fewer customers

Starbucks still managed a nice growth percentage of 5 % (on a like-for-like basis), but the chain admitted that the customers' increased tendency to purchase online has damaged its potential. “Holiday 2013 was the first in which many traditional brick and mortar retailers experienced in-store foot traffic give way to online shopping in a major way”, Starbucks CEO, Howard Schultz, has explained in a press release.

Schultz added that the company has plans to fight this trend, but fewer people in shopping centres obviously means that these places generate less revenue. Bad weather in the United States in December also contributed negatively to the lower-than-expected numbers.

Starbucks still hugely relies on its home market, as that is where the chain gets 70 % of its revenue. Turnover did increase 5 %, even though analysts had expected a 6.4 % growth here. The previous two American quarters resulted in a 9 % and 8 % increase.

 

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