Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Starbucks are Down Today

By John Rosevear - Updated Mar 12, 2020 at 10:24AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

How much will retail traffic fall as the coronavirus outbreak grows?

What's happening

Shares of Starbucks (SBUX 3.87%) opened sharply lower on Thursday, as growing concerns about the effects of the novel coronavirus pandemic on businesses and the economy drove a broad-based market sell-off.

As of 11 a.m. EDT, Starbucks shares were down about 7% from Wednesday's closing price.

So what

Like just about every business with a retail presence, Starbucks is exposed to the growing likelihood that customer foot traffic will decline sharply as people stay home to try to slow the spread of COVID-19. 

3 iced drinks in plastic cups with the Starbucks logo.

Image source: Starbucks.

To its credit, Starbucks has moved quickly to try to respond to virus-related concerns:

  • For customers, CEO Kevin Johnson said the company will implement protective measures at its stores on a store-by-store basis as needed. Those could include removing tables to increase distances between patrons, expanding mobile order-and-pay capabilities, and if necessary, converting some stores to drive-through-only stations.
  • For employees, there's a new "catastrophe pay" provision, under which employees diagnosed with COVID-19 will get 14 days to "self-quarantine" at full pay, while those showing symptoms will get three paid days of paid leave after a 24-hour self-quarantine.

Now what

For Starbucks investors, the thing to do now is to watch and wait. The company seems to have done what it can to be ready for a fast-growing pandemic; the question is, how long will it last? 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Starbucks Corporation Stock Quote
Starbucks Corporation
SBUX
$78.11 (3.87%) $2.91

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.