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During the past few quarters, Starbucks struggled with continuous Low sales The store traffic is slowed due to the choice of customers to get the morning coffee cup in competing cafes instead.
One of the many complaints and the reasons for this decline is the consumer hatred of Starbucks prices, which tends to be higher than most cafes and has risen over the years due to inflation and additional duties for customization.
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Since he took the position of CEO of Starbucks, Brian Niccol emphasized the need to return the company to its roots by focusing on its basic products, allocating the cafe experience as it did once, and maintaining prices from the increase.
Related: Starbucks CEO announces a major update of the transformation plan
Nicole said at the same Profit call.
Starbucks transformation plan is threatened with definitions
To restore work, Starbucks ((astonishment)) A transformation strategy aimed at improving the comprehensive experience of customers by redesigning stores, improving efficiency, and setting coffee quality priorities, Simplify its listAnd maintaining prices from the rise in 2025.
Starbucks try to freeze prices Get rid of additional fees For milk alternatives, reduce customization options, the menu elements stop, and provide free packages for those who Consuming in stores.
However, President Donald Trump’s new tariff can make the Starbucks goal of freezing prices without risking more profit losses.
Related: Starbucks removes the favorite of the fan, shocking customers
President Trump announced in February that he will implement an additional 25 % tariff on all the goods imported to the United States from Canada and Mexico, a 10 % tariff in China, and a 10 % tax.
However, on April 2, President Trump announced that foreign trade and economic practices have created a national emergency. It has implemented a new tariff on imported products in the United States from many countries, including an additional 10 % base tariff.
President Trump claims that these newly imposed definitions aim to combat this concern by encouraging the production and purchase of American products, which will increase the competitive edge, protect sovereignty, and promote national and economic security.
Starbucks’s main product faces challenges amid customs tariffs
Although Starbucks is an American company, most of them are Coffee was imported From more than 30 different countries around the world. Since more than 70 countries of coffee producers, only about 1 % of all coffee consumed in the United States is made inside the country.
Starbucks coffee sources are one of the three main regions produced by: Latin America, Africa and Asia/Pacific. Asia is one of the areas with the highest definitions, where Vietnam is now facing a 46 % tariff on imported goods in the United States
However, since Starbucks only buy arabica beans and Vietnam mainly produce Robusta coffee, the sources of the giant coffee from this region are much smaller than others.
Many companies from all sectors are concerned about the negative financial repercussions that can have the implementation of these definitions on their business because some depend heavily on the goods imported from these selected countries.
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Coffee beans constitute about 10 % to 15 % of the production and distribution of Starbucks. However, the company is not considered a setback and has previously mentioned that it will not raise prices in 2025.
Starbucks stated that the effect of coffee prices on an annual basis on the first quarter of the fiscal year 2025 in its latest profit call, expressing her confidence in the pricing strategy.
The company maintained its prices by changing costs, including providing less discounts and removing prices throughout the day to ensure better distribution to the list and times.
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