Horrible Customer Service Batters Starbucks

By Douglas A. McIntyre Published Oct 23, 6:20AM EDT

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Horrible Customer Service Batters Starbucks — © opengridscheduler / Flickr

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Starbucks Corp. (NASDAQ: SBUX | SBUX Price Prediction) posted a horrible quarter and suspended its forecasts.
Customer dissatisfaction resulted in a sharp decline in same-store traffic.
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Starbucks Corp. (NASDAQ: SBUX) posted a horrible quarter and suspended its forecasts. It did not discuss how deeply dissatisfied its customers are and how unhappy its baristas are.

According to Reuters, “Baristas complain about what they say are chronic understaffing and poor pay and benefits, and their inability to easily ban aggressive customers from Starbucks stores. Zealous customers want consistently good coffee.” Such opinions were downplayed in comments that were part of the quarterly revenue presentation. CEO Brian Niccol described the problem as “fixable,” which is unlikely to help solve the trouble quickly, bring back upset customers, or soothe overworked employees. He did mention the benefits that Starbucks workers have. They have not made baristas happier.

Customer dissatisfaction was reflected in a 6% reduction in same-store traffic in the United States and 7% worldwide. The situation in China, which should have been the key to the company’s future growth, dropped 14%. Larger local coffee store chain Luckin Coffee has bested Starbucks.

Starbucks revenue dropped 3% during the quarter to $9.1 billion. Earnings declined from $1.06 to $0.80 per share.

Finally, one barista told Reuters that Starbucks does nothing about “rude and hostile customers.” It is just one employee’s comment, but it doesn’t help the company’s image with its customers or its front-line workers.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.