Key Points
Starbucks (NASDAQ: SBUX) is facing customer dissatisfaction due to frequent stockouts of popular food items, which could negatively impact repeat business and brand loyalty.
New CEO Brian Niccol’s initiatives, including uniform policies and a community-focused brand strategy, have yet to show tangible operational improvements, raising uncertainty about a near-term turnaround.
Upcoming earnings will be critical, as investors are skeptical the company can reverse current service and inventory issues while competing with consistent rivals like McDonald’s and Dunkin’.
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Watch the Video
Transcript:
[00:00:05] Doug McIntyre: Starbucks. Awful. I was in there and I go to ones in Connecticut, Michigan, New York. Very often they don’t have the food you want. You walk in, you know I want an egg box. Sorry, we’re out of them. I want a sausage sandwich. Sorry. We’re out of them. You order ahead.
[00:00:23] Doug McIntyre: Say we’re out of them. You know this new guy, Brian Niccol, if. So far, he’s just a loser. He’s come committed so far. Yeah, he hasn’t,
[00:00:33] Lee Jackson: I mean, granted he hasn’t been there that long, if Starbucks investors are looking for like a Chipotle (NYSE: CMG) sort of turnaround, they may get it, but it ain’t gonna be this year.
[00:00:43] Lee Jackson: And you’re right, the just, that’s absurd. Any place like that. especially a morning place like that where people go every single morning. You can’t be out of food and their food isn’t any good anyway except for the, you know, banana bread and croissants and bagels and stuff like that.
[00:01:01] Lee Jackson: That’s fine. But the sandwich is the stuff not that great. And yeah, I, that’s, that’s, they’re on this branding, you know, kick now and it’ll be interesting to see if anybody cares.
[00:01:11] Doug McIntyre: Well, listen, Niccol has made the decision that people have to wear uniforms, that he wants to turn it into a community coffee house, right?
[00:01:19] Doug McIntyre: That people have to move back to Seattle to be at the headquarters while he flies in his private jet from Southern California to be there. But of course, he’s not gonna fire sweet gig, but you know Starbucks, he knows this. You get one chance to make a customer happy very often. Right? Yep. You go in, they don’t have the food, the customer gets disappointed, and there are a lot of great places.
[00:01:42] Doug McIntyre: I mean, like Dunkin Donuts is awesome. Yeah. McDonald’s has a perfectly acceptable breakfast. I’ve never been to a McDonald’s and run out of where they had, were out of food. Maybe no honor. The Shake machine was broken a few times, but yeah. McDonald’s knows how to run inventory and it appears that Starbucks either doesn’t wanna do it right or it’s too expensive to keep things in inventory where if they don’t run out of ’em, they gotta throw ’em away.
[00:02:11] Doug McIntyre: But that’s not a good way to do business is well, you know, we’ll save a little bit of money. That way, but we’ll make all of our customers upset.
[00:02:19] Lee Jackson: So Well then and, and that’s the least of their problems, really. I mean, their service issues, the attitude, the baristas have the lines when you get one of their lines and it takes forever to move, especially if you’re going through the drive-through.
[00:02:33] Lee Jackson: So yeah, it, their earnings are coming and we, we’ll be certain to review them and hey, they could prove it’s wrong, but I don’t think they will.
[00:02:42] Doug McIntyre: No. Too many people can go too many other places.
[00:02:45] Lee Jackson: Right.
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