Recently, the globally renowned coffee chain brand Starbucks announced that it will abandon its previous "low price strategy", marking that promotional activities such as "buy one get one free" and a 50% discount may become a thing of the past. This significant transformation occurred after Brian Nichol took over as the new CEO of Starbucks, determined to lead the company out of its sluggish performance and revitalize the brand.
On October 22, local time, Starbucks announced its preliminary results for the fourth quarter and full year of the 2024 fiscal year ending September 29, 2024. Net revenue for the fourth quarter decreased by 3% to $9.1 billion, and global same store sales decreased by 7%.
According to analysis, Starbucks' fourth quarter performance was mainly affected by weak revenue in North America. Specifically, same store sales in the United States decreased by 6%, comparable transaction volume decreased by 10%, but this was partially offset by a 4% increase in average selling price. Same store sales in China decreased by 14%, average selling price decreased by 8%, and comparable transaction volume decreased by 6%.
Former Starbucks CEO Nathan once advocated frequent sending of coupons through the app to drive user consumption frequency, but this strategy did not effectively improve performance. Especially after the epidemic, numerous low-priced coffee brands with an average price of a few yuan have emerged in the market, causing Starbucks' discount prices to lose their advantage in multiple markets.
Faced with this challenge, Brian Nichol decided to fundamentally change his strategy. He recently proposed that Starbucks needs to return to its original intention and reshape its brand value, and admitted that the current customer experience is being challenged. To achieve this goal, Starbucks management is actively developing relevant plans aimed at regaining consumer favor.
At the same time, Starbucks also announced the suspension of the release of its 2025 fiscal year performance guidance in order to give the new CEO more time to turn the business around. This measure demonstrates the cautious attitude of Starbucks executives towards the future development of the brand and their firm confidence in the new strategy.
Brian Nichol described the fourth quarter of fiscal year 2024 (13 weeks ending September 29, Q3 of the calendar year) and full year performance, stating that while the results reflect some challenges, Starbucks is committed to regaining growth momentum through a series of reform measures.
It is reported that Starbucks currently has over 40000 stores worldwide. As of the end of the third quarter of this year, there were 7306 stores in China, accounting for over 18% of the total number of stores worldwide.
(Yangcheng Evening News · Yangcheng Pai Comprehensive Pengpai News, Global Network)