Year after year, Starbucks has seen growth in traffic to their stores. For the first time in Starbucks history, this year, they have seen an overall decline in traffic. The decrease in visits is being linked to consumers not having as much disposable income as they did years past. In order to save money to pay for higher gas and food prices, customers are cutting out the latte.
Howard Schultz, CEO of Starbucks, says that his company will have to innovate and provide more value to the customer. He feels that customers do not come to Starbucks just for coffee, but for the sense of community, and the sense of humanity in their stores. He describes Starbucks as the third place between home and work.
Although 50 million customers a week are coming through Starbucks stores, this represents only 8% of the total U.S. coffee market in terms of cups that are consumed. Starbucks still has room for growth and one key competitive advantage they do have is the unique customer experience and sense of community inside Starbucks.