Starbucks' Challenges and Investment Opportunities - podcast episode cover

Starbucks' Challenges and Investment Opportunities

May 18, 20248 min
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Episode description

In this insightful clip of Market Mondays, hosts Rashad Bilal, Troy Millings, and Ian Dunlap dive deep into the recent challenges faced by Starbucks. From a significant stock decline, dropping from $126 in 2021 to approximately $73, to cultural backlashes and operational missteps, they cover everything influencing Starbucks' current market position. They also discuss the potential role of Howard Schultz in reviving the brand and what it might take for Starbucks to regain its competitive edge.


As Starbucks faces backlash from various communities and reported conflicts in the Middle East affecting their sales and brand image, the discussion also touches upon broader themes of boycotting and corporate responsibility. Moreover, they explore how Starbucks' response to these issues and its attempt to enhance customer service, like improving the mobile order and rewards system, could be pivotal.


The clip doesn't just highlight problems but also deliberates on whether these dips in performance represent a buying opportunity for investors. With the price point nearing $63, Rashad notably shifts from critique to potential endorsement, provided the company addresses its shortcomings.


Join us on Market Mondays as we unravel whether Starbucks can blend its way back to the top amidst the brewing troubles and if it's the right time for investors to stock up.


#MarketMondays #Starbucks #Investing #StockMarket #CorporateResponsibility #HowardSchultz #Boycott #BrandChallenges #FinancialAnalysis #InvestmentOpportunities


Enjoy deep dives into major companies and market trends every Monday with us, and don't forget to like, subscribe, and hit the notification bell for more updates!



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Transcript

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Speaker 3

So let's talk about Starbucks, all right. Considering Starbucks stock decline from one hundred and twenty six dollars in twenty twenty one to seventy three roughly today, is this a signal of diminishing popularity or is it an opportunity to invest.

Speaker 1

I think it's a combination.

Speaker 4

We were talking before we start recording about not losing the trust of the people. I think all brands listen up across America, stop taking black people for granted. I go back to when that one person got mistreated over not being able to use the bathroom. That was the start of a gradual decline when a lot of us said, Okay, we won't shop there anymore. I do believe that if we're not being treated fairly by brands, that we should

weaponize our dollars and not spend. Then they turn around, as Target did, as a few other companies did, and tried to target the LGBTQ plus community to make.

Speaker 1

Up for the losses of sales from US.

Speaker 4

Didn't work. Conservative investors left as a result. Howard Schultz probably is going to need to come back.

Speaker 1

A game. Can that one.

Speaker 4

I keep telling you there's no such thing as freedom, Like once you get past a certain level, if things are not going right, you gotta come back. So now it's at a price point where I almost like it. Maybe if it gets like sixty three bucks, I wouldn't mind buying it. I do like the company, but the service needs to improve. I said it on a stock club call yesterday, going back to you guys's point about

Instagram being one of the biggest competitors. Starbucks used to be a third home, a place where you can go after work just to do work. But if I'm black and I'm going to get the police called on me for trying to use a bathroom. A lot more attention is being eaten up by digital platforms and people and products are not as good. Service is not as good, the stores are not as clean. So I think they need to bring Schultz back, even though he doesn't want to.

I'm bullets on the company and he definitely forgets the sixty three bucks. I love it, sixty five I love it, But I think they have a whole bunch of cultural issues that they need to fix and not just put a band aid on it. I know y'all did that one training for one day when you shut the store down and told every employee not to be racist.

Speaker 1

It's not enough. It's not enough. I'm glad you brought up that point.

Speaker 2

It's a valid point because that did happen and that was the response to it. But it leads to the overall theme of boycotting and what has happened. And I mean, they could try to run from it, but the publications of all news Week, you know, Wall Street Journal, Washington Post, their response to the conflict between Gayza and Israel, has has weighed on the company.

Speaker 1

Right.

Speaker 2

They were claiming they supported Israel in fund of its military operations during the conflict. That hasn't helped what has happened inside of the Middle East region, which is interesting.

Speaker 1

Because they have stores there. People are boycotted.

Speaker 2

Two thousand jobs have been cut, sore, sales have gone down. That is a problem, right. Their response to that has been a problem. The competitive advantage is another problem. What is the competitive advantage? I'm not an avid coffee drinker. I know plenty of them, I worked with plenty of them. But if a person cannot have Starbus, does that mean they can't have coffee anymore. No, They'll go to Duck

and Dunts. They'll go right, or they'll have somebody making it at the office, or they'll have somebody brewing it at their home.

Speaker 1

So that competitive advantage is kind of interesting.

Speaker 2

The other point, I'm glad you brought Howard Sultau because they asked him about it. He said that the company needs to improve its mobile order and pay experience hasn't been great.

Speaker 1

If you've ever got all Starbucks and a Starbucks point system is it's a joke? Point? Yeah?

Speaker 2

Like, I've been there a few times and ordered something and got to the window.

Speaker 1

I'm like I'm sorry, we don't have it, Like, well, why do you let me order it? Right? Yeah?

Speaker 2

And then they said how they create new drinks? Right, And that's interesting because it's like, what is the marketing campaign that goes into creating a new drink other than if you don't walk in the store, you see it. Yeah, there really isn't any ad for it. You really built the company on experience. It was an experience. I remember when it was like, oh, you can go there, the place to meet, it's a social gathering place, it's.

Speaker 1

Free Wi Fi.

Speaker 2

But everybody has that now, so now what is the experience when you get to the store. And then the other part is they're trying to figure out premium items to set them.

Speaker 1

Apart from the competitors. It's tough inside of that business. I don't know.

Speaker 2

I mean, I'm not an expert on the coffee brewing process, but I'm not what is the premium item inside of it that they can create. I guess that's one of the things that they'll have to figure out, which is what Schultz is saying and probably why he might have to come back another time to take over and come up with some innovative ideas. To get this company going back forward, because that's a pretty swift drop from thirty

to seventy three. And if you look at the earnings over the past couple of quarters, it hasn't been great.

Speaker 1

So how do you get this company going back in the right direction.

Speaker 2

It's going to take innovation, it's going to take some pr it's going to take some marketing. But like you said, I don't think it's not over for Starbucks. It's not going anywhere, but they need to help.

Speaker 5

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