What’s Next for Starbucks After Losing $3.2 Billion?
Buying a dollar or two of coffee from Starbucks daily is responsible for making the Seattle-based brand a successful company known worldwide over the years. In the US alone, the coffee giant owns approximately 39.8% of the coffee market. That is more than one third of the entire coffee shop industry. You’d be able to see at least one Starbucks in every block.
But despite being considered a market leader in the coffee industry, the pandemic proved that no one is safe. Starbucks has recorded billions of dollars lost due to the pandemic. The company in the second quarter recorded a $3.2 billion loss.
Lockdowns and Social Distancing
The lockdown is one of the biggest reasons for the company’s losses. Coupled with the fact that people stayed at home to work, people have no reason to grab a cup of coffee at Starbucks.
Another reason why Starbucks is struggling is the fact that they’ve relied so much on their coffee shops that allowed their customers to stay. There are only a few stores that have a drive thru, which is something that could’ve helped them reduce the negative impact of the pandemic to their sales.
Adapting to the Changes
The company has no other choice but to adapt to the changes brought about by the pandemic. Instead of having a coffee shop where people could sit around, Starbucks is planning to have a “pickup” store where they will need less spaces for their coffee shops to operate.
From being the midway destination between home and work, the pandemic caused Starbucks to redesign their gameplan. In Japan, the new Starbucks in Ginza allows customers to order online and just pick up their cup of coffee once they are in the area.
The future isn’t looking great for Starbucks given the unexpected turn of events in 2020. In Canada, around 200 additional stores will most likely close while some will relocate.
Fighting for the Breakfast Market
One of the things that Starbucks is looking into is to win the fight for the breakfast market. Apart from the fact that Dunkin Donuts has cheaper breakfast than Starbucks, some customers also have come up with many other reasons to prefer the donut shop over the coffee giant. One of which is having delicious donut selection that you don’t see from Starbucks.
People Brewing Their Coffee At Home
The main reason why people end up at Starbucks in the first place is because they don’t have the time to make their coffee at home. But as people start to work at home, reducing the time needed to get to work, more people are now brewing their own coffee at home.
Given this trend, Starbucks and even other coffee shops all over the world should brace themselves. Without a vaccine that can help solve the COVID19 problem, these companies may be going to experience more losses in the coming months.
We see more Starbucks shops closing in the next months if this problem continues. Though the pandemic is controlled in some parts of the world, it still doesn’t give people enough reason to go out.