Pershing Square Activist Presentation Deck
Potential Causes of U.S. SSS Weakness
Increased competition at the high and low-end
Boutique coffee shops offer more premium options than Starbucks
McDonald's $2 small espresso-based drinks appeal to cost-conscious customers
Rapid acceptance of mobile order & pay ("MO&P") caused traffic congestion
at peak times, resulting in lost sales
▪ Organizational focus on fixing MO&P issues may have caused management to "take its
eye off the ball" with regard to product innovation, marketing, and operations
Weakness in the afternoon daypart due to recent consumer shift away from
Frappuccino and lack of food innovations
Afternoon has highest consumption of cold beverages and food, as well as the highest
concentration of infrequent customers
Change from transaction-based to spend-based loyalty program has
negatively impacted sales from frequent, lower-ticket customers
Sales cannibalization from increased licensed unit growth
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