Starbucks is finding growth harder to come by.
Last year, Starbucks controlled 26.5% of the U.S. coffee and snack shop market, according to research firm IBISWorld. However, the coffee giant has seen global same-store sales decline over the past two quarters.
“When you’re the market leader, everyone else comes for you and they try to nibble away at your market share. And there is a lot more competition than there used to be,” said Neil Saunders, managing director of GlobalData Retail.
Starbucks cafes have long been a “third place” for customers to work and socialize outside of their home or office. But experts say the company is now less experiential than it used to be. This has led to increased competition, with value players like McDonald’s and quick-service restaurants vying for a more price-conscious customer.
“What matters right now is obvious value. The consumer is more ‘choiceful,'” said Kevin McCarthy, a managing director at Neuberger Berman.
Watch the video to learn more about how Starbucks is trying to address its recent challenges.