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“I will have a pumpkin spice latter, double pump of sugar, no foam please”

“Sir, this is a Wendy’s. Starbucks is next door”

Starbucks could be back. This week, I am looking at why the company had 5 consecutive quarters of declining profits, and how it’s trying to get back to the old Starbucks of before.

Moving on, here are the news that shocked the world…

Starbucks $SBUX ( ▼ 0.91% ) : Is the optimism back? Starbucks just announced that it is adding more assistant store managers and seating to its outlets to get ‘back to Starbucks’ [Read More]

Shopify $SHOP ( ▲ 4.04% ) : But it doesn’t have Dogecoin! Well, Shopify is partnering with Coinbase and Stripe to enable stablecoin payment on its platform. [Read More]

Roku X Amazon $ROKU ( ▲ 3.45% ) : Roku got in bed with Amazon Ads to bring advertisement services to Roku TV's estimated 80 million users. [Read More]

Reddit $RDDT ( ▲ 4.96% ) : Reddit is using AI in its community platform? Well, it just launched Reddit Community Intelligence to identify trends that could help advertisers market [Read More]

JetBlue $JBLU ( ▲ 4.15% )  : JetBlue is feeling the blues after a failed acquisition of Spirit Airlines, and it’s planning to reduce flight routes to break-even for the year [Read More]

Outsmart college costs

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Here are the news covering the Asia market…

Labubu $LABUBU.X ( 0.0% )  : Is Labubu feeling the bubu? Share prices dropped after Morgan Stanley dropped the company from a focus list [Read More]

Singapore economy: Analysts have lowered Singapore’s economic growth forecast to 1.7% as relations between U.S. and China worsens [Read More]

Wilmar International: Wilmar’s Indonesian subsidiaries were hit by corruption charges and it has agreed to place $930 million as security deposit [Read More]

Sembcorp: Sembcorp has just finished acquiring additional stakes in Senoko Energy for $72 million to bring it to 50% of the company [Read More]

AIMS APAC REIT: AIMS APAC REIT has just sold 3 Toh Tuck Link (warehouse, office) for $24.3 million, a 33% premium to its valuation [Read More]

See below for our handpicked analyst reports:

Is Starbucks about to rise again?

It’s no secret that Starbucks has been struggling. I still remember I used to chill at a Starbucks to talk with friends and colleagues, sipping on hot latte.

But that’s not the Starbucks that you know now.

In recent years, Starbucks shifted to having less seats and made things minimalistic. They don’t want you to sit down and enjoy because space and rent are expensive.

Instead, they want you to buy a coffee to go and leave.

It doesn’t help that it also rolled out an online ordering platform, where customers could just order and have it delivered and collected now.

There was no more warmth in customer interaction - just cold hard button-pressing and arriving to collect it.

That didn’t go well with its customers.

From the 1Q 2024 to 4Q 2024,

1. Revenue declined at an average rate of 1.5%

2. Profits declined even further by an average of close to 20%.

In August 2024, Starbucks appointed a new CEO, Brian Niccol. He’s famous for leading the turnaround in Chipotle.

Since then, he has pivoted Starbucks back to its old ways.

• Reinvested in renovation and decoration that is ‘warm’ and ‘inviting’

• Rent out more seats for people to sit, chat and enjoy a nice day

• Laid off 1,100 redundant jobs to cut costs

Brian Niccol recently met with 14,000 store managers to talk about Starbucks future.

And that has received positive responses to them

Key to this was to allow store managers to tell leadership how many workers they will need.

Furthermore, he has also created a new assistant manager position to help the store managers manage better.

Because of overwork, Starbucks employees have unionised and Niccol definitely wants to keep relations with them friendly.

Most importantly, it is clear what Starbucks wants. To re-create the old Starbucks culture and environment, where customers come and have a good chat with the baristas, sip on some coffee, and chat with their family and friends.

He quit his job, found a wife, bought a secondhand fish farm, almost went bankrupt, and now supplies fish and mussels to supermarkets around Singapore.

Oh, did I tell you he loves flowers more than people?

Living life at sea is not easy.

For city folks like me, I can’t imagine such a life. Day in and day out of rearing fishes and mussels, repairing nets, fending off pests, and taking care of the whole farm.

But it does motivate me to work harder for my own business.

He ran the farm for close to 20 years, with countless hardships and near-bankruptcies.

And today, he spends his time tending to his garden, admiring his flowers, and enjoying the fruits of his labour.

I aspire to be that.

Hope the above is fruitful for you all!

Cheers,
James Yeo