WEBVTT - Starbucks' Challenges and Investment Opportunities

0:00:01.240 --> 0:00:02.000
<v Speaker 1>Earners. What's up.

0:00:02.080 --> 0:00:04.560
<v Speaker 2>You ever walk into a small business and everything just

0:00:04.720 --> 0:00:07.880
<v Speaker 2>works like The checkout is fast, the receipts are digital,

0:00:08.400 --> 0:00:11.399
<v Speaker 2>tipping is a breeze, and you're out the door before

0:00:11.400 --> 0:00:15.560
<v Speaker 2>the line even builds. Odds are they're using Square. We

0:00:15.720 --> 0:00:18.280
<v Speaker 2>love supporting businesses that run on Square because it just

0:00:18.280 --> 0:00:21.520
<v Speaker 2>feels seamless. Whether it's a local coffee shop, a vendor

0:00:21.560 --> 0:00:23.840
<v Speaker 2>at a pop up market, or even one of our

0:00:23.880 --> 0:00:27.560
<v Speaker 2>merch partners, Square makes it easy for them to take payments,

0:00:27.760 --> 0:00:31.480
<v Speaker 2>manage inventory, and run their business with confidence, all from

0:00:31.600 --> 0:00:35.000
<v Speaker 2>one simple system. If you're a business owner or even

0:00:35.080 --> 0:00:38.600
<v Speaker 2>just thinking about launching something soon, Square is hands down

0:00:38.640 --> 0:00:41.680
<v Speaker 2>one of the best tools out there to help you start, run,

0:00:41.920 --> 0:00:45.240
<v Speaker 2>and grow. It's not just about payments, it's about giving

0:00:45.240 --> 0:00:47.519
<v Speaker 2>you time back so you can focus.

0:00:47.159 --> 0:00:48.760
<v Speaker 1>On what matters most Ready.

0:00:48.760 --> 0:00:52.159
<v Speaker 2>To see how Square can transform your business, visit Square

0:00:52.240 --> 0:00:56.760
<v Speaker 2>dot com backslash go backslash eyl to learn more that

0:00:56.960 --> 0:01:02.400
<v Speaker 2>Square dot com backslash, go backslash eyl. Don't wait, don't hesitate.

0:01:02.520 --> 0:01:04.880
<v Speaker 2>Let's Square handle the back end so you can keep

0:01:04.920 --> 0:01:11.000
<v Speaker 2>pushing your vision forward. This episode is brought to you

0:01:11.040 --> 0:01:13.320
<v Speaker 2>by P and C Bank, a lot of people think

0:01:13.360 --> 0:01:17.240
<v Speaker 2>podcasts about work are boring, and sure, they definitely can be,

0:01:17.760 --> 0:01:21.000
<v Speaker 2>but understanding of professional's routine shows us how they achieve

0:01:21.080 --> 0:01:25.280
<v Speaker 2>their success little by little, day after day. It's like

0:01:25.360 --> 0:01:28.160
<v Speaker 2>banking with P and C Bank. It might seem boring

0:01:28.160 --> 0:01:31.000
<v Speaker 2>to save, plan and make calculated decisions with your bank,

0:01:31.440 --> 0:01:33.920
<v Speaker 2>but keeping your money boring is what helps you live

0:01:34.000 --> 0:01:38.080
<v Speaker 2>a more happily fulfilled life. P and C Bank Brilliantly

0:01:38.160 --> 0:01:42.720
<v Speaker 2>Boring since eighteen sixty five. Brilliantly Boring since eighteen sixty

0:01:42.720 --> 0:01:46.000
<v Speaker 2>five is a service mark of the PNC Financial Service Group, Inc.

0:01:46.480 --> 0:01:49.840
<v Speaker 2>P and C Bank National Association Member FDIC.

0:01:51.800 --> 0:01:57.560
<v Speaker 3>So let's talk about Starbucks, all right. Considering Starbucks stock

0:01:57.640 --> 0:02:01.720
<v Speaker 3>decline from one hundred and twenty six dollars in twenty

0:02:01.800 --> 0:02:05.720
<v Speaker 3>twenty one to seventy three roughly today, is this a

0:02:05.760 --> 0:02:13.919
<v Speaker 3>signal of diminishing popularity or is it an opportunity to invest.

0:02:15.760 --> 0:02:16.760
<v Speaker 1>I think it's a combination.

0:02:17.160 --> 0:02:19.480
<v Speaker 4>We were talking before we start recording about not losing

0:02:19.480 --> 0:02:23.320
<v Speaker 4>the trust of the people. I think all brands listen

0:02:23.440 --> 0:02:27.640
<v Speaker 4>up across America, stop taking black people for granted. I

0:02:27.760 --> 0:02:30.799
<v Speaker 4>go back to when that one person got mistreated over

0:02:30.919 --> 0:02:33.760
<v Speaker 4>not being able to use the bathroom. That was the

0:02:33.800 --> 0:02:37.080
<v Speaker 4>start of a gradual decline when a lot of us said, Okay,

0:02:37.080 --> 0:02:40.200
<v Speaker 4>we won't shop there anymore. I do believe that if

0:02:40.200 --> 0:02:42.760
<v Speaker 4>we're not being treated fairly by brands, that we should

0:02:42.760 --> 0:02:46.760
<v Speaker 4>weaponize our dollars and not spend. Then they turn around,

0:02:47.000 --> 0:02:49.240
<v Speaker 4>as Target did, as a few other companies did, and

0:02:49.320 --> 0:02:53.560
<v Speaker 4>tried to target the LGBTQ plus community to make.

0:02:53.440 --> 0:02:56.560
<v Speaker 1>Up for the losses of sales from US.

0:02:57.200 --> 0:03:03.200
<v Speaker 4>Didn't work. Conservative investors left as a result. Howard Schultz

0:03:03.240 --> 0:03:05.079
<v Speaker 4>probably is going to need to come back.

0:03:07.080 --> 0:03:08.280
<v Speaker 1>A game. Can that one.

0:03:08.520 --> 0:03:11.040
<v Speaker 4>I keep telling you there's no such thing as freedom,

0:03:11.080 --> 0:03:14.040
<v Speaker 4>Like once you get past a certain level, if things

0:03:14.040 --> 0:03:16.280
<v Speaker 4>are not going right, you gotta come back. So now

0:03:16.320 --> 0:03:18.120
<v Speaker 4>it's at a price point where I almost like it.

0:03:18.160 --> 0:03:20.840
<v Speaker 4>Maybe if it gets like sixty three bucks, I wouldn't

0:03:20.880 --> 0:03:24.440
<v Speaker 4>mind buying it. I do like the company, but the

0:03:24.520 --> 0:03:27.880
<v Speaker 4>service needs to improve. I said it on a stock

0:03:27.919 --> 0:03:31.000
<v Speaker 4>club call yesterday, going back to you guys's point about

0:03:31.000 --> 0:03:34.280
<v Speaker 4>Instagram being one of the biggest competitors. Starbucks used to

0:03:34.360 --> 0:03:36.200
<v Speaker 4>be a third home, a place where you can go

0:03:36.240 --> 0:03:38.960
<v Speaker 4>after work just to do work. But if I'm black

0:03:38.960 --> 0:03:41.800
<v Speaker 4>and I'm going to get the police called on me

0:03:41.840 --> 0:03:45.440
<v Speaker 4>for trying to use a bathroom. A lot more attention

0:03:45.560 --> 0:03:49.920
<v Speaker 4>is being eaten up by digital platforms and people and

0:03:50.480 --> 0:03:53.600
<v Speaker 4>products are not as good. Service is not as good,

0:03:53.760 --> 0:03:55.680
<v Speaker 4>the stores are not as clean. So I think they

0:03:55.680 --> 0:03:57.760
<v Speaker 4>need to bring Schultz back, even though he doesn't want to.

0:03:59.000 --> 0:04:00.920
<v Speaker 4>I'm bullets on the company and he definitely forgets the

0:04:01.000 --> 0:04:03.600
<v Speaker 4>sixty three bucks. I love it, sixty five I love it,

0:04:04.120 --> 0:04:05.960
<v Speaker 4>But I think they have a whole bunch of cultural

0:04:06.000 --> 0:04:08.120
<v Speaker 4>issues that they need to fix and not just put

0:04:08.120 --> 0:04:09.560
<v Speaker 4>a band aid on it. I know y'all did that

0:04:09.600 --> 0:04:11.400
<v Speaker 4>one training for one day when you shut the store

0:04:11.440 --> 0:04:13.840
<v Speaker 4>down and told every employee not to be racist.

0:04:14.120 --> 0:04:18.080
<v Speaker 1>It's not enough. It's not enough. I'm glad you brought

0:04:18.120 --> 0:04:18.719
<v Speaker 1>up that point.

0:04:19.279 --> 0:04:23.600
<v Speaker 2>It's a valid point because that did happen and that

0:04:23.760 --> 0:04:25.640
<v Speaker 2>was the response to it. But it leads to the

0:04:25.680 --> 0:04:30.200
<v Speaker 2>overall theme of boycotting and what has happened. And I mean,

0:04:30.560 --> 0:04:32.720
<v Speaker 2>they could try to run from it, but the publications

0:04:32.760 --> 0:04:36.960
<v Speaker 2>of all news Week, you know, Wall Street Journal, Washington Post,

0:04:38.160 --> 0:04:44.920
<v Speaker 2>their response to the conflict between Gayza and Israel, has

0:04:45.120 --> 0:04:46.200
<v Speaker 2>has weighed on the company.

0:04:46.440 --> 0:04:46.600
<v Speaker 1>Right.

0:04:46.600 --> 0:04:49.560
<v Speaker 2>They were claiming they supported Israel in fund of its

0:04:49.560 --> 0:04:54.520
<v Speaker 2>military operations during the conflict. That hasn't helped what has

0:04:54.560 --> 0:04:57.400
<v Speaker 2>happened inside of the Middle East region, which is interesting.

0:04:57.160 --> 0:04:59.919
<v Speaker 1>Because they have stores there. People are boycotted.

0:05:01.080 --> 0:05:04.800
<v Speaker 2>Two thousand jobs have been cut, sore, sales have gone down.

0:05:05.960 --> 0:05:08.720
<v Speaker 2>That is a problem, right. Their response to that has

0:05:08.720 --> 0:05:12.560
<v Speaker 2>been a problem. The competitive advantage is another problem. What

0:05:12.680 --> 0:05:15.440
<v Speaker 2>is the competitive advantage? I'm not an avid coffee drinker.

0:05:15.560 --> 0:05:17.720
<v Speaker 2>I know plenty of them, I worked with plenty of them.

0:05:18.040 --> 0:05:20.279
<v Speaker 2>But if a person cannot have Starbus, does that mean

0:05:20.320 --> 0:05:22.400
<v Speaker 2>they can't have coffee anymore. No, They'll go to Duck

0:05:22.440 --> 0:05:25.920
<v Speaker 2>and Dunts. They'll go right, or they'll have somebody making

0:05:25.960 --> 0:05:27.840
<v Speaker 2>it at the office, or they'll have somebody brewing it

0:05:27.880 --> 0:05:28.320
<v Speaker 2>at their home.

0:05:28.720 --> 0:05:31.200
<v Speaker 1>So that competitive advantage is kind of interesting.

0:05:31.600 --> 0:05:34.400
<v Speaker 2>The other point, I'm glad you brought Howard Sultau because

0:05:34.520 --> 0:05:36.320
<v Speaker 2>they asked him about it. He said that the company

0:05:36.400 --> 0:05:40.000
<v Speaker 2>needs to improve its mobile order and pay experience hasn't

0:05:40.040 --> 0:05:40.479
<v Speaker 2>been great.

0:05:40.760 --> 0:05:44.000
<v Speaker 1>If you've ever got all Starbucks and a Starbucks point

0:05:44.120 --> 0:05:48.200
<v Speaker 1>system is it's a joke? Point? Yeah?

0:05:48.200 --> 0:05:51.360
<v Speaker 2>Like, I've been there a few times and ordered something

0:05:51.360 --> 0:05:52.080
<v Speaker 2>and got to the window.

0:05:52.120 --> 0:05:53.920
<v Speaker 1>I'm like I'm sorry, we don't have it, Like, well,

0:05:53.920 --> 0:05:56.120
<v Speaker 1>why do you let me order it? Right? Yeah?

0:05:56.160 --> 0:05:58.320
<v Speaker 2>And then they said how they create new drinks? Right,

0:05:58.520 --> 0:06:02.359
<v Speaker 2>And that's interesting because it's like, what is the marketing

0:06:02.440 --> 0:06:05.000
<v Speaker 2>campaign that goes into creating a new drink other than

0:06:05.040 --> 0:06:07.839
<v Speaker 2>if you don't walk in the store, you see it. Yeah,

0:06:07.960 --> 0:06:11.320
<v Speaker 2>there really isn't any ad for it. You really built

0:06:11.360 --> 0:06:14.719
<v Speaker 2>the company on experience. It was an experience. I remember

0:06:14.720 --> 0:06:16.440
<v Speaker 2>when it was like, oh, you can go there, the

0:06:16.480 --> 0:06:19.479
<v Speaker 2>place to meet, it's a social gathering place, it's.

0:06:19.320 --> 0:06:20.040
<v Speaker 1>Free Wi Fi.

0:06:21.240 --> 0:06:24.800
<v Speaker 2>But everybody has that now, so now what is the

0:06:24.880 --> 0:06:26.520
<v Speaker 2>experience when you get to the store. And then the

0:06:26.560 --> 0:06:29.160
<v Speaker 2>other part is they're trying to figure out premium items

0:06:29.240 --> 0:06:29.920
<v Speaker 2>to set them.

0:06:29.760 --> 0:06:33.880
<v Speaker 1>Apart from the competitors. It's tough inside of that business.

0:06:35.000 --> 0:06:35.800
<v Speaker 1>I don't know.

0:06:35.960 --> 0:06:40.960
<v Speaker 2>I mean, I'm not an expert on the coffee brewing process,

0:06:41.320 --> 0:06:43.520
<v Speaker 2>but I'm not what is the premium item inside of

0:06:43.520 --> 0:06:46.239
<v Speaker 2>it that they can create. I guess that's one of

0:06:45.520 --> 0:06:48.120
<v Speaker 2>the things that they'll have to figure out, which is

0:06:48.200 --> 0:06:51.320
<v Speaker 2>what Schultz is saying and probably why he might have

0:06:51.400 --> 0:06:54.400
<v Speaker 2>to come back another time to take over and come

0:06:54.480 --> 0:06:56.719
<v Speaker 2>up with some innovative ideas. To get this company going

0:06:56.760 --> 0:07:00.360
<v Speaker 2>back forward, because that's a pretty swift drop from thirty

0:07:00.400 --> 0:07:03.600
<v Speaker 2>to seventy three. And if you look at the earnings

0:07:03.640 --> 0:07:06.040
<v Speaker 2>over the past couple of quarters, it hasn't been great.

0:07:06.320 --> 0:07:09.840
<v Speaker 1>So how do you get this company going back in

0:07:09.840 --> 0:07:10.480
<v Speaker 1>the right direction.

0:07:10.680 --> 0:07:14.280
<v Speaker 2>It's going to take innovation, it's going to take some

0:07:14.400 --> 0:07:17.560
<v Speaker 2>pr it's going to take some marketing. But like you said,

0:07:17.640 --> 0:07:20.360
<v Speaker 2>I don't think it's not over for Starbucks. It's not

0:07:20.400 --> 0:07:22.720
<v Speaker 2>going anywhere, but they need to help.

0:07:22.880 --> 0:07:26.480
<v Speaker 5>An illegal alien from Guatemala charged with raping a child

0:07:26.560 --> 0:07:30.360
<v Speaker 5>in Massachusetts. An MS thirteen gang member from Al Salvador

0:07:30.600 --> 0:07:34.720
<v Speaker 5>accused of murdering a Texas man of Venezuelan charged with

0:07:34.800 --> 0:07:38.720
<v Speaker 5>filming and selling child pornography in Michigan. These are just

0:07:38.800 --> 0:07:42.560
<v Speaker 5>some of the heinous migrant criminals caught because of President

0:07:42.600 --> 0:07:46.120
<v Speaker 5>Donald J. Trump's leadership. I'm Christy Noman, the United States

0:07:46.200 --> 0:07:51.000
<v Speaker 5>Secretary of Homeland Security. Under President Trump, attempted illegal border

0:07:51.040 --> 0:07:54.560
<v Speaker 5>crossings are at the lowest levels ever recorded, and over

0:07:54.640 --> 0:07:57.840
<v Speaker 5>one hundred thousand illegal aliens have been arrested. If you

0:07:57.920 --> 0:08:01.400
<v Speaker 5>were here illegally, your net next you will be fine.

0:08:01.480 --> 0:08:05.560
<v Speaker 5>Nearly one thousand dollars a day. Imprisoned and deported, you

0:08:05.640 --> 0:08:09.200
<v Speaker 5>will never return. But if you register using our CBP

0:08:09.360 --> 0:08:12.080
<v Speaker 5>home app and leave now, you could be allowed to

0:08:12.120 --> 0:08:16.960
<v Speaker 5>return legally. Do what's right. Leave now. Under President Trump

0:08:17.120 --> 0:08:20.720
<v Speaker 5>America's laws, border and families will be protected.

0:08:20.800 --> 0:08:22.960
<v Speaker 1>Sponsored by the United States Department of Homeland Security,