Starbucks sales drop by 7% amid boycott over Israel ties

Starbucks, the global coffee giant, reported a 7 percent reduction in global sales for the July-September quarter, marking its third consecutive quarter of decline.

The downward trend is reflected in the company's full fiscal year results, with a 2 percent drop in comparable store sales and a 25 percent decrease in earnings per share to 80 cents.

The company's consolidated net revenues also declined by 3 percent to $9.1 billion for the 52-week period ending September 29. 

CEO Brian Niccol attributed the disappointing performance to a combination of factors, including declining customer traffic, increased competition in China, and a cautious consumer environment.

However, experts suggest that Starbucks' financial woes may also be linked to the growing global boycott movement protesting the company's ties to Israel. 

The coffee chain has faced intense criticism and protests worldwide for its perceived support of Israel's actions in Gaza.

The Gaza Ministry of Health reported that over 42,700 Palestinians have lost their lives, with women and children accounting for the majority of victims, since October 7, 2023. 

Starbucks' financial struggles began last year when it lowered its annual sales forecast due to declining sales in the Middle East. 

The company's revenue fell 2 percent in January-March, followed by a 4 percent decline in global sales in April-June, the first since 2020.

CFO Rachel Ruggeri acknowledged that despite increased investments, the company has yet to see significant improvements in customer traffic. 

However, Starbucks claims to have a long-term plan to revitalise its business.