What’s haunting Starbucks stock?

A number of problems at home and abroad. At home,

Starbucks is facing market saturation, as there’s a
Starbucks store or two in almost every
neighborhood.  This means that there are no more
opportunities to open new stores.
Postoje problem na domaćem i stranom tržištu. Na
domaćem, Starbaks se suseće sa zasićenošću tržišta,
po jedna ili dve radnje se nalaze u svakom komšiluku.
Što znači da nema više mogućnosti za otvaranje nove
radnje.
With market saturation comes store cannibalization, a
situation where one company store takes away
business from other stores.
Sa zasićenošću tržišta dolazi I cannibalization radnji,
to je situacija gde jedna kompanija uzima posao
frugoj.
Market saturation and store cannibalization can
explain the company’s sluggish same store sales in the
U.S., which has forced Starbucks to announce store
closings in recent weeks.
Then there’s Starbucks’ loss of identity. For years, the
company has been known as a "third place," an
"affordable luxury" where middle-age baby boomers
could share and enjoy a cup of coffee with friends and
colleagues, away from work and home.
In recent years, however, Starbucks has been
attracting bigger and bigger crowds, from all walks of
life, including families with young children.
This means that Starbucks is turning from a cool
"third place" to another routine “first place."
Company/Index 3-month performance 5-year performance
Starbucks -11.38% 55.57%
Dunkin Brands 16.46 49.62
S&P 500 4.10 68.24

Source: Finance.yahoo.com 6/25/2018

Meanwhile, there’s competition at home and abroad
from both established and upstart companies.
For years, Starbucks had little competition both at
home and abroad. For a simple reason: competitors
couldn’t match its business model. Some replicated
the company’s espresso beverage menu --
like McDonald's with its McCafe product line. Others
copied its "third place" concept -- like Costa Cafe in
London and Caffe Bene in New York City.
But none of these competitors succeeded in
developing a business model that beats Starbucks in
all four advantages: beverage, store setting, service,
and culture.
With little competition, Starbucks sales soared. Back
in 2015, for instance, Starbucks’ revenues and
earnings grew at the high teens levels, as McDonald’s
revenues and earnings headed south.
That was music in the ears of momentum investors
who fell in love with the stock.
But in recent years, things have changed, both at
home and abroad. At home, Starbucks is facing
growing competition from McDonald’s McCafes and
all-day breakfast, as evidenced by the recent
turnaround in McDonald’s sales. Overseas, Starbucks
is facing strong competition from home-grown start-
ups that have managed to match and even exceed
Starbucks “third place” model.
Like Greece-based Mikel Coffee Company, which
features a portfolio of 130 beverages — and an
elegantly designed “third place” look, staffed by
carefully recruited and well-trained and dedicated
associates.
That's how Mikel expanded like wildfire in Greece, the
Middle-East and the U.K., opening up 185 stores in
nine years, with plans to open more stores in Egypt,
Saudi Arabia, Germany and the U.S.
The bottom line: Starbucks’ long bull run is over, as
the company turns from a growth to a value play.