Starbucks Shares Fall to Lowest level since 2022

Shares of Starbucks fell during Thursday and Friday trading on the Wall Street Stock Exchange, reaching its lowest level since November 2022, despite the continued rise in the company’s revenues.

Starbucks shares recorded their lowest levels at $87, with the company having lost more than 16% of its market value within one year and its market valuation falling below $100 billion.

Multiple reports published by the American press said that Starbucks shares declined sharply, affected by the rise in coffee prices on the global market, which raises production costs in the chain of coffee shops it owns around the world.

The second reason for the stock's decline is that the company was forced to raise the wages of its workers in the United States, which immediately forced it to raise the prices of its products as a result of the increase in operational costs, which led to the expectation of a decline in demand for its products.

Starbucks shares are currently trading about 16% lower than they were a year ago, but at this level they have declined by more than 21% from their highest level recorded in 2023.

The shares fell due to the rise in the prices of “Robusta” coffee to a record level of $3,745, which is much higher than the lowest level recorded in 2021, which amounted to $1,176. Only a dollar.

Coffee prices have more room to rise due to ongoing concerns about supply, with countries such as Vietnam and Indonesia experiencing one of the worst heatwaves in recent years, and as a result, their exports are expected to fall by more than a fifth this year.

The report pointed out that other countries such as Kenya, Uganda and Ethiopia are not working to increase their coffee production due to previous declines in prices.

Experts say that coffee, like cocoa, is considered a more complex commodity than others because it cannot be easily replaced, and this means that farmers cannot rush back to growing coffee to take advantage of high prices, as on average it takes a coffee tree a few years to start producing.

Starbucks' share price also fell after the company warned of a slowdown in China, as it is witnessing strong competition there. The company said its total revenues rose by 8% in the first quarter to $9.4 billion. However, the company warned that its business in China may slow down due to competitors.

The report said prices of Starbucks menu items increased from $0.50 to $1.00 by comparing previous receipts to current prices.

A Starbucks spokesperson confirmed that prices at stores across California had increased in response to the new minimum wage but declined to specify the average increase.