Hospitality

Starbucks’ Slump Continues as Brand Favorability Declines

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It’s not just the mid-afternoon slump; global coffee chain Starbucks has reported a plateau in sales and a drop in its stocks. Sales haven’t budged, even after Starbucks has been in the news with plastic straw bans and employee education initiatives.

CivicScience has been tracking consumer sentiment of Starbucks since 2015, with over 60,000 U.S. adults indicating their feelings towards the brand.

Favorability of Starbucks started to fall in Q4 2017. Unsurprisingly, this sentiment lines up with a plateau in sales for the quarter. Can the drop be attributed to a disappointing menu of specialty drinks, the oft-debated holiday cup designs, or perhaps diminishing returns on the “limited edition beverage” promotion?

Starbucks attributed the stalled holiday sales “partly on the company’s holiday limited-time-offers (LTOs) and holiday merchandise not resonating with customers.” However, even after the holiday season, favorability continued to trend down.

Market analysts attribute the plateau, and subsequent drop of Starbucks stock with market saturation, and consumer sentiment might agree. Based on recent CivicScience data, Starbucks’ key American consumer market approves of the plastic straw ban, but still, favorability of the brand isn’t bouncing back.

Based on data CivicScience reported on in April, Starbucks took a big hit in favorability after the incident in the Philadelphia store. Favorability has been in a slump, but its decline became exaggerated in Q2. It seems that the lack of customer base growth, in combination with bad press, could be keeping customers away.

While initiatives like the straw ban and having social education seminars after the chain’s incident in Philadelphia are perceived as positive messages, it doesn’t look like they’ve won many customers back.

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