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Miami Herald
25 minutes ago
- Miami Herald
Starbucks' problems may be too big to fix
In its early days, Starbucks' approach was unique. Unlike rivals like Dunkin', Tim Hortons, and breakfast diners, its mission wasn't to provide one coffee for everyone as fast as possible. Instead, it treated making coffee like a craftsman makes fine furniture, focusing on the highest quality product regardless of how long it takes. That approach helped Starbucks grow from a single store in Seattle, Washington, to a coffee powerhouse with 32,000 stores located in just about every nook and cranny of the globe, including: Over 18,000 stores in North 2,800 stores in than 6,500 stores in 1,300 stores in the Middle East and North Africa. 1,800 locations in Latin America, including more than 70 in Colombia, putting Starbucks about as close to the coffee's origins as possible. With that kind of growth, and plenty of shareholders eager for ever-increasing profits, it's pretty unsurprising that Starbucks has dealt with growing pains. The company has faced controversies over worker pay (and what they wear), and customer complaints over inconsistent drink tastes, food freshness, and, more generally, the rise of a less-relaxed cafe vibe, too focused on boosting transactions and profit margin. The situation has left many scratching their heads, wondering if Starbucks' new CEO, Brian Niccol, can get things back on track. Long-time hedge fund manager Doug Kass is among the doubters. He recently sent a particularly harsh message about Starbucks, suggesting Niccol's strategy to get Starbucks back to its roots is unlikely to pan out. Image source: Goodney/Bloomberg via Getty Images Starbucks' (SBUX) stock price financed a good chunk of the company's global expansion. Investors eagerly bought shares early in the company's growth phase to profit from the opportunity for its customer-first approach to dislodge market share from rivals like Tim Hortons and Dunkin'. Long-time shareholders have been handsomely rewarded, given that Starbucks shares have surged since its IPO in 1992. A $10,000 investment then would be worth over $3 million today. Related: Starbucks abandons key strategy to embrace its past However, many investors' love affair with Starbucks has faded since the company has mostly saturated major US markets like New York and California, reducing chances for sales growth. Its share price is up just 15% over the past five years, while the S&P 500 has climbed 89%. In 2025, Starbucks' stock price has fallen nearly 5%. With Starbucks stores seemingly everywhere, long-time hedge fund manager Doug Kass suggests the company's strategy nowadays is less about reimaging coffee houses and more about milking as much money out of existing locations as possible. Such an approach can boost earnings in the short term, but it poses a significant long-term risk to Starbucks' brand. "[Starbucks] morphed into overpriced purveyors of food/coffee - while the quality of their product offering has deteriorated and the selling cost of the product has risen," wrote Doug Kass in a post to investors on TheStreet Pro. It's not just the coffee, either. While many may think Starbucks bakes its treats on site, many are previously frozen. "I couldn't create a danish as unappealing," said Kass, who has managed money professionally for about 50 years. Some Starbucks employees agree that the company's mission has lost its way. It was once highly recognized as a pioneer in employee pay, offering solid wages and a "partner" approach to its workers. Employees, however, have increasingly explored unionization in recent years, saying the faster-paced environment is taking a heavy toll on its once-lauded baristas, and pay hasn't kept pace. Starbucks' response to unionization has drawn fire from worker advocates who suggest management has engaged in union-busting decisions. For example, the National Labor Relations Board (NLRB) has accused the company of firing or disciplining workers, including the high-profile case involving the "Memphis 7," seven workers terminated after advocating unionization. That case went to the Supreme Court, where an earlier court decision to grant an injunction supporting the workers was reversed in Starbucks' favor, and the case was sent back to the lower courts. The first corporate Starbucks location to unionize was in Buffalo in 2021, led by Starbucks Workers United. As of August 2025, workers at over 600 Starbucks stores across the US have voted to unionize, according to Workers United. The company's frayed relationship with some employees isn't the only problem CEO Brian Niccol is trying to fix. Niccol joined Starbucks as CEO in 2024 after over six years at the helm of Chipotle. Shortly after Niccol took over as Starbucks' CEO, he acknowledged, "a shared sense that we have drifted from our core" and announced his "Back To Starbucks' plan to get the company back on track, focusing on a "welcoming coffeehouse where people gather and where we serve the finest coffee, handcrafted by our skilled baristas." However, those comments and Niccol's plans sound hollow to Kass. "When he got to Starbucks, Niccol started off by using fancy jargon to distract from the fact that Starbucks is losing to both value and premium brands/operators," wrote Kass. "Starbucks now faces a very expensive overhaul in its physical locations and product offerings." Starbucks' competitive advantage hasn't been lost on rivals. Big rivals like Dunkin' and McDonald's have expanded menus, including popular refreshers, while local mom-and-pop cafes have leaned hard into the artisanal coffee house vibe. Related: McDonald's to test five crazy new drinks Winning back market share from those players won't be easy. As a result, Niccol's overhaul could pressure Starbucks' profits while ultimately doing little to restore Starbucks's culture, disappointing investors. "The brand is now very weak competitively - they aren't premium (artisans, local brands, etc.) and the previous also-rans are coming in hot with smaller footprints," said Kass. "From a product standpoint, they sell more chemicals, sugar and ice - it's not coffee." Undeniably, many remain loyal Starbucks fans, but there are more choices, and with less connection to the employees, the moat of loyalty isn't nearly as strong as it was in the past. "It is the Regal Cinemas concession stand without the movies. The notion that the baristas want to hang with the customers has been lost," said Kass. "I suspect the turnaround in both companies will take a lot longer than the consensus expects." To be sure, Starbucks' challenges aren't unique. Indeed, most companies experiencing the kind of success it has experienced deal with similar issues. Still, the hyper-competitive coffee market and the challenges facing Niccol leave Kass thinking that there are better alternatives for investors. "I would not bottom fish despite the material share-price weakness," concluded Kass. Related: Why did stocks tumble this week? The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
34 minutes ago
- Yahoo
Tesla ordered by Florida jury to pay $243 million in fatal Autopilot crash
By Jonathan Stempel and Abhirup Roy (Reuters) -A Florida jury on Friday found Tesla liable to pay $243 million to victims of a 2019 fatal crash of an Autopilot-equipped Model S, a verdict that could encourage more legal action against Elon Musk's electric vehicle company. The verdict is a rare win for victims of accidents involving Autopilot. Musk has been pushing to rapidly expand Tesla's recently launched robotaxi business based on an advanced version of its driver assistance software. Tesla shares fell 1.8% on Friday, and are down 25% this year. Jurors in Miami federal court awarded the estate of Naibel Benavides Leon, as well as her former boyfriend Dillon Angulo, $129 million in compensatory damages plus $200 million in punitive damages, according to a verdict sheet. Tesla was held liable for 33% of the compensatory damages, or $42.6 million. Jurors found the driver George McGee liable for 67%, but he was not a defendant and will not have to pay his share. "Tesla designed Autopilot only for controlled-access highways yet deliberately chose not to restrict drivers from using it elsewhere, alongside Elon Musk telling the world Autopilot drove better than humans," Brett Schreiber, a lawyer for the plaintiffs, said in a statement. "Today's verdict represents justice for Naibel's tragic death and Dillon's lifelong injuries," he added. Tesla said it will appeal. "Today's verdict is wrong and only works to set back automotive safety and jeopardize Tesla's and the entire industry's efforts to develop and implement life-saving technology," the company said. The plaintiffs had sought $345 million of damages. Their lawyers said the trial was the first involving the wrongful death of a third party resulting from Autopilot. IMPACT ON FUTURE CASES Tesla has faced many similar lawsuits over its vehicles' self-driving capabilities, but they have been resolved or dismissed without getting to trial. In June, a judge rejected Tesla's bid to dismiss the Florida case. Experts said Friday's verdict may spur more lawsuits, and could make future settlements more costly. "It's a big deal," said Alex Lemann, a law professor at Marquette University. "This is the first time that Tesla has been hit with a judgment in one of the many, many fatalities that have happened as a result of its Autopilot technology." The verdict could also impede efforts by Musk, the world's richest person, to convince investors that Tesla can become a leader in so-called autonomous driving for private vehicles as well as robotaxis it plans to start producing next year. As Tesla's electric vehicle sales fall, much of its nearly $1 trillion market value hinges on Musk's ability to pivot the company into robotics and artificial intelligence. DRIVER'S ROLE The trial concerned an April 25, 2019 incident where George McGee drove his 2019 Model S at about 62 mph (100 kph) through an intersection into the victims' parked Chevrolet Tahoe as they were standing beside it on a shoulder. McGee had reached down to pick up a cellphone he dropped on his car's floorboard and allegedly received no alerts as he ran a stop sign and stop light before hitting the victims' SUV. Benavides Leon was allegedly thrown 75 feet (23 meters) to her death, while Angulo suffered serious injuries. "We have a driver who was acting less than perfectly, and yet the jury still found Tesla contributed to the crash," said Philip Koopman, a Carnegie Mellon University engineering professor and expert in autonomous technology. "The only way the jury could have possibly ruled against Tesla was by finding a defect with the Autopilot software," he added. "That's a big deal." Tesla, in its statement, said McGee was entirely at fault. "To be clear, no car in 2019, and none today, would have prevented this crash," the company said. "This was never about Autopilot; it was a fiction concocted by plaintiffs' lawyers blaming the car when the driver - from day one - admitted and accepted responsibility."
Yahoo
39 minutes ago
- Yahoo
‘Grade A' Apple Watches Are Selling for as Much as 62% Off
The Arena Media Brands, LLC and respective content providers may receive compensation for some links to products and services on this website. 'Grade A' Apple Watches Are Selling for as Much as 62% Off originally appeared on Athlon Sports. The Arena Media Brands, LLC and respective content providers may receive compensation for some links to products and services on this website. If you loathe paying retail, listen up. A company owned by Amazon is rewarding those who don't immediately buy new tech, and instead wait for a good deal. "Grade A Refurbished" Apple Watches are selling for as much as 62% off at Woot. The Apple Watch Series 8, 41mm, GPS Only (Grade A Refurbished) is on sale for $150. That's 62% off its original price of $399. This means you're getting an Apple Watch for a third of the price it was when released in September 2022. Apple Watch Series 8: Models and Sizes and Colors, Oh My! Just because this Apple Watch isn't brand-new, doesn't mean you don't have choices. Woot is offering both the GPS and GPS + Cellular models of this watch. You can get it in two sizes, 41mm and 45mm, and four color combinations. The Red is bold, but I might grab the Midnight because of its versatility. What are the details for a "Grade A Refurbished" watch? Woot says, "Hey, you there! These items have been inspected and guaranteed to have minimal cosmetic damage, which is not noticeable when the device is held at arm's length, and have successfully passed a full diagnostic test, which ensures like-new functionality and removal of any prior user's personal information. Batteries are tested to function at minimum 85% capacity." This purchase comes with a one-year limited warranty from Woot. Apple Watch Series 8, 41mm, GPS Only (Grade A Refurbished), $150 (Comp. $400) at Woot Apple Watch Series 8 "Grade A" Refurbished, 62% Off More purchasing options for Apple Watches, you can grab at a sizable discount: Apple Watch Series 8 (2022), (Refurbished): As Low as $200 (Comp. $400) at Best Buy Apple Watch Series 9 (2023), 41mm, GPS (Grade A Refurbished): $220 (Comp. $400) at Woot Apple Watch Series 9 (2023), (Refurbished): As Low as $220 (Comp. $430) at Best Buy Apple Watch Ultra 1st Gen (2022), 49mm, GPS + Cellular (Grade A Refurbished): $380 (Comp. $800) at Woot Apple Watch Ultra 1st Gen (2022), (Refurbished): As Low as $430 (Comp. $800) at Best Buy At the time of publishing, Woot has a sizable selection of "Grade A" Apple watches listed. Check them out before they sell out. What Shoppers Are Saying: 'Love a Refurbished Deal' Woot pulled in over 2,600 Amazon ratings from buyers for the Apple Watch Series 8. The average star rating from Amazon is 4.2 out of five. One satisfied buyer says, "Very happy with this refurbished Apple Watch Series 8. Looks and works like new with no visible scratches or issues. Battery life is great, and all features function perfectly. Setup was quick and easy. Great value compared to buying new. Highly recommend if you're looking to save without sacrificing quality." Another five-star reviewer says, "This watch has all the bells and whistles of a new Apple Watch but without the price tag. Love a refurbished deal. Felt good rehoming this beauty. Battery life is okay (had to get used to charging it every two days). I went from a Fitbit to an Apple Watch, and there is for sure a learning curve. Both with the functionality and the user interface. I used it as I was training for a marathon. It monitored all my health metrics and alerted when I was in need of a rest day." Another reviewer says, "Love, love, love it. One tiny scratch and you can't see it unless you put it right in front of your eye. I'm so in love. Looks brand new. Works very well. Only problem is that when I had gotten it, it was super dead. Charged it for about two hours, and everything was great." Deals on Apple iPhones: As Much as 41% Off Are you in the market for more than just a great deal on an Apple Watch? Woot is also selling "Grade A Refurbished" Apple iPhones. Below are a few they have listed, but be sure to check out all the listings for their "Grade A" iPhones before they're gone. Apple iPhone 16 Pro Max (2024), 256GB, Fully Unlocked (Grade A Refurbished): $980 (Comp. $1,199) at Woot Apple iPhone 16 Pro (2024), 128GB, Fully Unlocked (Grade A Refurbished): $730 (Comp. $999) at Woot Apple iPhone 15 Pro Max (2023), 256GB, Fully Unlocked (Grade A Refurbished): $720 (Comp. $1,199) at Woot Apple iPhone 15 Pro (2023), 128GB, Fully Unlocked (Grade A Refurbished): $590 (Comp. $999) at Woot Shipping, Returns, and Woot Perks Woot offers $6 flat rate shipping for all purchases, but since it's an Amazon company, Amazon Prime members get free shipping with no order minimums. Woot does offer returns, but be sure to check the details for the particular product you're purchasing. 💰 Bottom Line Some buy new tech as soon as it drops, and some wait patiently for a good price. If you're in the latter group, snatching up one of these refurbished deals is a no-brainer. Woot listings frequently sell out, so be sure to grab your new-to-you Apple device before it's gone. 'Grade A' Apple Watches Are Selling for as Much as 62% Off first appeared on Athlon Sports on Aug 2, 2025 This story was originally reported by Athlon Sports on Aug 2, 2025, where it first appeared.
