As for why the decline was so severe
Posted: Tue Feb 18, 2025 3:12 am
Starbucks Chief Financial Officer Rachel Ruggeri said at the earnings conference that increased competition and a weak macro environment affected consumer spending.
In the previous third quarter conference call, then CEO Laxman Narasimhan clearly pointed out that in the past year, the industry has seen unprecedented store expansion and largescale price wars, with some peers even sacrificing samestore sales and profitability, which has caused significant and permanent changes to the market environment.
In 2023, the price war between Luckin Coffee at 9.9 yuan and Kudi australia phone number list Coffee at 8.8 yuan prompted many coffee brands to follow suit. For example, Lucky Coffee launched a promotion of 2 cups for 9.9 yuan, and the “9.9 yuan” promotion became the standard.
Although Starbucks verbally insists that it will not participate in price wars, it actually reduces prices in disguise through a series of strategies. For example, promotional activities such as "15 yuan off for purchases over 70 yuan", "69.9 yuan for three designated drinks for a limited time", and "49.9 yuan for two cups of new coffee" were launched; by participating in group buying activities on local life online platforms such as Meituan, Elee, and Douyin, the preferential price of a single cup of some products was even reduced to less than 20 yuan.
In the previous third quarter conference call, then CEO Laxman Narasimhan clearly pointed out that in the past year, the industry has seen unprecedented store expansion and largescale price wars, with some peers even sacrificing samestore sales and profitability, which has caused significant and permanent changes to the market environment.
In 2023, the price war between Luckin Coffee at 9.9 yuan and Kudi australia phone number list Coffee at 8.8 yuan prompted many coffee brands to follow suit. For example, Lucky Coffee launched a promotion of 2 cups for 9.9 yuan, and the “9.9 yuan” promotion became the standard.
Although Starbucks verbally insists that it will not participate in price wars, it actually reduces prices in disguise through a series of strategies. For example, promotional activities such as "15 yuan off for purchases over 70 yuan", "69.9 yuan for three designated drinks for a limited time", and "49.9 yuan for two cups of new coffee" were launched; by participating in group buying activities on local life online platforms such as Meituan, Elee, and Douyin, the preferential price of a single cup of some products was even reduced to less than 20 yuan.