This post highlights a serious problem facing Starbucks – consumers are spending less time in their stores, and this trend continues to get worse.
Starbucks’ once-dominant model involved packing urban corners with cozy cafés for work and socializing. But this relied on full offices and daily commutes. Remote work changed everything, erasing weekday rushes and gutting downtown profits.
This had led to closures of many Starbucks locations. A third of recent LA shutdowns were in the city-center, with similar trends in Chicago, New York, and Seattle.
The other problem involves the flood of mobile orders, which optimized speed but killed ambiance. Starbucks stores now feel much more transactional: order, grab, go. We see the long lines both at the drive-through and inside the store. When I want to meet someone for a coffee, whether for business or socializing, Starbucks is no longer the top option. I’ll try to find a Panera or a local brand coffee shop, as I know the Starbucks experience isn’t what it used to be.
The key metric of customers lingering 10+ minutes has fallen over a year, even with changes implemented by new CEO Brian Niccol. Stayers drive revenue with second drinks, snacks, repeat visits, etc.
We’ll see if Niccol can find a way to reverse this trend. It doesn’t help that we’re facing an economic slowdown, and expensive coffee drinks will be a luxury that many consumers won’t be able to afford.
