What’s going on with Starbucks?

By Amisha Temal, Staff Writer

Starbucks is the largest coffeehouse chain in the world and dominates the beverage, breakfast and lunch industry. In recent years, like many other large corporations, Starbucks has faced many struggles due to numerous social, political, financial and economic factors.

COVID-19 was the onset of the company’s current issues, costing the company around $3 billion. Starbucks’ stock (SBUX) dropped from $114 a share to $75. During the height of the pandemic, numerous stores temporarily closed or had reduced hours for the safety of their employees. Over 15 stores in America permanently closed. Strict lockdown measures in China contributed significantly to the decrease in the company’s sales. China has a rapidly growing number of Starbucks locations. Almost all of these were shut down, drastically reducing the number of international sales.

Many Starbucks employees were driven to despair by the pandemic. As a result, more than 250 stores unionized and advocated for better working conditions and livable wages. The first store to form a union was in upstate NY. In an unfair labor practice complaint filed in Buffalo, NY, the regional director of the National Labor Relations Board accused Starbucks of 29 violations. The company had charges of 200 violations of the National Labor Relations Act. This occurrence encouraged other employees across the country to follow suit and unionize and boycott.

Though Starbucks employees aren’t on the front lines fighting viruses, their jobs can be stressful and challenging. Despite being considered partners by the company, minimum wage workers claim they aren’t treated accordingly. College students make up the majority of employees, many of whom are overworked and underpaid. They have limited control over their work schedules, so they sometimes have to work long hours at times that are not convenient for them. Since the summer of 2022, Starbucks has had an in-store traffic problem. Stores started to receive an accumulation of orders in a short time. Employees have to act quickly to compensate for the low number of staff. Online, images of drinks and brown Starbucks food bags crowding the pickup counters at Starbucks circulate on various social media platforms. The low staff is due to many employees being fired for unionizing. Many employees also walked out of stores as a protest against management.

Freshman biology major Habiba M started working at Starbucks in June 2022, prior to the pandemic. 

“ After the pandemic, the state of New York issued new mandatory Health laws that staff has to follow. Starbucks has always been strict with cleanliness. So, there wasn’t anything I had to get used to.  You always wash your hands before you go on the floor and constantly wipe/sanitize the counters where we make the beverages, also we check the lobby and make sure everything is neat. Something that changed because of Covid is that we don’t put milk, cinnamon, and sugar in the lobby because it increases the chance of disease spreading as people will touch the same objects. Instead, when they ask for a specific amount we give it to them on the side in a short cup. The Hardest part of my job, which doesn’t really happen that often, is when a customer is rude to us, which can get uncomfortable sometimes but Starbucks allows you to walk away if you can’t handle the situation, let someone else handle it or if it gets very unsafe, you can file an incident report. The majority of my customers are very nice. My favorite part in my job is when I craft beverages, hand them to the customers and see them loving their beverage especially when they leave a compliment about how it tastes so good. Overall working, I love my job at Starbucks but if I could change one thing it would be more pay during rush hours. ”  

Starbucks is notorious for being more expensive than its competitors. Their prices are much higher on average than Dunkin’ Donuts and Tim Horton’s. Around February 2022, Starbucks raised the prices of its products. The company claimed that it was due to inflation, increased costs of commodities, and labor costs. As many other food chains adjusted their pricing to correlate with the mass inflation of products, this isn’t surprising. The company’s CEO, Kevin Johnson, told investors that the company plans to raise its costs in the future. Consumers are able to turn a blind eye to expensive Starbucks products. However, people are starting to question if it is worth the investment. Many argue that they can easily be replicated by other companies for a lower price. Other companies already offer products that are almost identical to what’s available at Starbucks. The food and drinks at Starbucks could also be made at home. There’s been a surge in “copycat” Starbucks recipes online that provide affordable recipes for Starbucks drinks and food. However, the convenience of buying your coffee and not making it on your own is part of the appeal.

Despite its reputation as a coffee shop, many argue that Starbucks today is most notable for its sugary non-coffee beverages such as matcha, chai and refreshers. Long-time Starbucks buyers have expressed concerns about the company as it moves away from its traditional coffee and breakfast niche and offers more complicated items. People miss the old Starbucks. Several in-demand and popular products have been recalled, including double shot espresso drinks. The beloved espresso drinks were pulled from the menu after it was revealed that the drinks were contaminated with foreign materials. The drinks were conveniently available in cans in retail stores, as well as regularly at Starbucks. A poll done by the food publication, Mashed, revealed that many coffee drinkers didn’t like the newly introduced holiday drinks at Starbucks. The new sugar cookie almond milk latte was not well received by some consumers. Many complained it wasn’t as good as other non-dairy drinks and had an unfavorable taste.

Starbucks announced that it would be making changes to its Rewards Loyalty program through an email sent to members in December 2022. Through the Rewards Loyalty Program, members can earn free items and receive discounts by collecting stars with each purchase. Each dollar spent at Starbucks translates into one star when members pay through the app. The value of the stars members earn through their purchases will be increasing. Fifty stars will have a value of 100 stars, 150 stars will have a value of 200 stars, and 200 stars will have a value of 300 stars. Members will have to spend more money to earn more stars. The changes will take effect on Feb. 13, 2023. Many people took to social media to express their disapproval of the changes. Many accused the company of trying to rip them off & make college students, a large fraction of their demographic, go further into debt.

It’s not too late for the company to change its trajectory. If the company listens to its employees and customers and takes an open-minded approach to development, it can overcome its weaknesses.