Starbucks' biggest problem is only getting worse (SBUX)

pulse

March 9, 2017 7:47 PM

Starbucks is having a rough start to 2017.

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Starbucks is having a rough start to 2017, as the chain struggles to attract customers to stores.

The coffee giant accounted for 11% of US restaurant foot traffic in February, down from 12% in January, according to data from the research firm Bloomberg.

An xAd spokesperson told Business Insider that it is difficult to pinpoint a specific factor that drove the change. However, Starbucks has recently been facing both operational issues and brand reputation challenges.

In January, Starbucks reported that transactions, an important measure of customer traffic, dropped 2% in the most recent quarter, in large part due to problems caused by mobile ordering. The company said bottlenecks created by a wave of mobile orders pouring into busy stores have resulted in crowds that turn some customers away.

The company also faced backlash after CEO Howard Schultz announced10,000 refugees worldwide in the next five years

Then there's the issue of this year's unseasonably warm winter. Bloomberg reported that customers typically buy less coffee during a mild winter, with sales of coffee at supermarkets falling 2.7% in January and 1.3% in February compared to last year, according to data from market-research firm IRI.

Starbucks told Business Insider that the company does not provide guidance outside of quarterly reports, and that the company has not reported any update to its guidance issued in January. At the time, Starbucks predicted it would deliver same-store sales in the mid-single digit range, with the front half of the year being below that range and the back half being above it.

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