Starbucks is in trouble

The fact that there are several other coffee compositions in addition to the coffee varieties “Café au Lait” and “Cappuccino” is something that many people in Germany may have experienced live for the first time in a Starbucks when something like “Iced Caramel Macchiato” was on the menu. It's been 16 years since the first Starbucks branches opened in Germany. There are now 156 across the country.

For years Starbucks was looking up in Germany. The hip café drinks from the USA were popular, customers were ready to spend twice or three times as much for a coffee as they would for a “coffee to go” at the kiosk. But something has changed, as the daily YouGov brand monitor BrandIndex shows: the upswing turned into a standstill.

Perceived quality decreases

In principle, the number of customers has not changed since mid-2013. Since then we have also been tracking the brand in the BrandIndex. And about four percent of all Germans aged 18 and over have since always stated that they recently bought something at Starbucks. So there are no fewer, but no more either. And so it fits into the picture that Starbucks has hardly opened any new branches in this country and even closed five branches.

A market reaction that Starbucks helped to trigger is certainly responsible for this stagnation: In Germany, countless branches of bakeries and bakery shops have opened, and with McCafé and Coffee Fellows, two successful competitors have joined. Still: Starbucks has also missed some opportunities for further development.

Starbucks sells its business with beans and beverages in supermarkets to Nestlé. The pioneer of sophisticated café bar chains seems to have passed its zenith - at least in Germany.

Since 2016, the Starbucks buzz in Germany has been almost continuously at plus-minus zero. In other words, there are just as many brand connoisseurs who perceive mostly negative things about Starbucks in the media or in conversations as there are those who perceive mostly positive things. This is not a particularly good starting point for a brand that wants to sell its products as an attitude towards life and an emotion.

In addition, the quality level attested by brand connoisseurs at Starbucks has fallen significantly in the past three years, and enthusiasm for the brand has noticeably faded. And, as is well known, Starbucks has always had its difficulties in terms of price-performance image. In the past few years, however, this has been assessed more critically by an increasing proportion of those we continuously surveyed. In addition, the willingness of all brand connoisseurs to recommend Starbucks has declined.

Starbucks USA reaches out to young consumers

For a long-term improvement of the brand image of Starbucks Germany, the motherland USA could be a role model. The buzz there has just dropped sharply because two Afro-Americans were wrongly arrested in a Starbucks branch, but the long-term development shows that Starbucks has managed to noticeably improve its brand image in the United States.

Nestlé buys the Starbucks business outside of the coffee shops. With this, the coffee roaster wants to shed ballast - and the Swiss food giant wants to make up lost ground.

Customer satisfaction has increased since last summer. And interest in Starbucks in the US is growing, as is the number of customers. In its home country, Starbucks apparently recognized earlier that the “Iced Caramel Macchiato” and the previous - although already varied - standard product range have lost their novelty value and their attraction. Instead, the chain picks up on existing trends, for example by offering "cold brew". And tries to maintain curiosity about the brand, most recently with "Blonde Espresso". That seems to resonate with American consumers - so far not with Germans.

An important aspect for Starbucks USA is also: The perceived price-performance ratio has meanwhile a positive trend. It should be particularly interesting for Starbucks that, of all things, the younger US brand connoisseurs in the age group of 18 to 35 year olds attest Starbucks a not so bad price-performance ratio. In Germany it is exactly the opposite. Younger people (18 to 30 years of age) in particular give the feedback: At Starbucks, I get little for my money. There is currently no sign of a trend reversal here.

Starbucks Germany simply cannot use the recent negative headlines from the USA. On the other hand, it would certainly be a good thing for the brand at the moment to transfer what it has successfully learned on the American market to Germany.

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