Starbucks Stock In Focus After Reversing Open Door Customer Policy: Retail’s Bearish

Shares of Starbucks ($SBUX) were in the spotlight as the coffee chain said it would reverse its open-door policy that allows people to hang out at the coffee shop or use its restrooms even if they don't make a purchase, dampening retail sentiment.

Starbucks’s proposed policy is part of a “new code of conduct” under its new CEO Brian Niccol. The policy seeks to ban panhandling, smoking, vaping, consuming outside alcohol, and discrimination, according to media reports.

The open-door policy had been put in place nearly seven years ago when two African American men who were in a business meeting were arrested at a Philadelphia store. The incident caused much public outrage.

Retail sentiment on Stocktwits turned ‘bearish’ from ‘bullish’ from last week, with many users doubting the soundness of the new policy. Message volumes jumped to ‘extremely high’ from ‘normal.’

Some users wondered if customers would flock to newer rivals.

In China, for instance, Starbucks is seeing growing competition from cheaper alternatives from local brands such as Luckin Coffee, which is trying to tap into price-conscious coffee lovers, The New York Times recently reported. 

There are “dozens of competitors to Starbucks” that launch new flavors for both tea and coffee every week and at lower prices, according to the report. Luckin Coffee  reportedly generates more sales than Starbucks in the country after launching just seven years ago.

Starbucks stock is up 1.99% year-to-date.

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