The “Back to Starbucks” plan is in full swing, and coffee giant Starbucks (SBUX) is showing off some of its newly-upgraded cafes with the theme of “come in, sit a while, and please oh please buy things” as a master plan. New reports say the renovations are definitely working in that direction, but investors seem concerned. Shares were down almost 2% in Friday afternoon’s trading.
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In a time when Luckin Coffee (LKNCY) is drawing interest in New York for being “…different…cool…(and) sleek….”, Starbucks’ battle plan of “…creat(ing) spaces that are immersive, inclusive, and deeply human.” seems like it might fall flat. However, that is the route Starbucks is going, and it already is drawing on everything from “…the laid-back warmth of the Palisades…” to “…the urban energy of Manhattan” to get customers coming in and staying in. In general, improvements like more and more comfortable seats and ceiling lights with less glare are also on tap.
Starbucks is set to drop around $150,000 per store, and means to do this to around 1,000 stores by the end of 2026, which is a serious spend at a time when sales have been down for several quarters running.
Even the Baristas Don’t Like the Service
Then, in what should be a bad sign for Starbucks as a whole, a new report from Starbucks Workers United and the Strategic Organizing Center emerged that says Starbucks service is pretty lousy, to the point where even the baristas themselves are not happy with it.
The report noted that 90% of Starbucks locations are understaffed, which means long wait times for customers. Moreover, the understaffing causes not only an “unrealistic burden on frontline staff,” but also worker schedules that are “uneven and mismanaged.” Given that the Back to Starbucks plan calls for substantial new hiring to speed up orders and also be friendly, this problem may be on the verge of repair.
Is Starbucks Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 14 Buys, nine Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 4.54% loss in its share price over the past year, the average SBUX price target of $100.57 per share implies 17.45% upside potential.
