Starbucks had 25 percent more stores at the end of 2017 than five years ago, and the company now has 127 more locations than McDonald’s. Starbucks executives claim the company is not losing market share or cannibalizing its own sales, but analysts disagree.
Sara Senatore, a Bernstein analyst, said “excess unit growth, at a time when Starbucks is reaching a more mature stage of growth, is the root cause” of the company’s challenges. The rapid increase in the number of Starbucks locations combined with more competition has made it difficult for the company to re-accelerate growth, said Jason West, a Credit Suisse analyst.
Starbucks may also be losing less affluent customers to rivals such as Dunkin’ Donuts and McDonald’s. Stephen Anderson, a Maxim Group analyst who tracks coffee prices in 10 markets in the Northeast, said Dunkin’ Donuts has raised prices by about 1 percent per year, while Starbucks has raised prices by roughly 3.5 percent each year. McDonald’s sells $1 coffee and $2 small espresso drinks and has kept prices mostly flat for the last few years, according to Reuters.
More articles on business:
Alphabet shares fall as Q4 profits miss estimates: 4 things to know
Amazon’s market cap exceeds $700B for first time
Why Apple buying Tesla is no longer a crazy idea: 4 things to know
Becker’s 3rd Annual Fall Chief Pharmacy Officer Summit is the top tier event that the people leading the future of pharmacy convene. This 3-day event is built specifically for Chief Pharmacy Officers and senior pharmacy leaders. The sessions examine the workforce, financial and clinical priorities shaping pharmacy today. Becker’s is where candid discussions flourish and new ideas thrive. Becker's 3rd Annual Fall Chief Pharmacy Officer Summit
