Coffee giant Starbucks is in trouble globally as consumers across the United States and China reject the brand.

However, in Australia – where the chain failed years ago – Starbucks opened its first of 12 planned Western Australian stores last week in a fresh bid to woo coffee drinkers.

Internationally there is scepticism among analysts that Starbucks can regain its standing with consumers in core markets like the US and China, where sales plunged in 2023-24.

The company last week blamed a “cautious consumer environment” and competition from rival Luckin Coffee in China for a 3 per cent fall in global revenue last financial year to $9.1 billion.

Same store sales growth plunged 6 per cent in the US and a whopping 14 per cent in China.

“We need to fundamentally change our strategy so we can get back to growth,” Starbucks’ new chief executive and chairman Brian Niccol said.

Starbucks’ boss in Australia has been singing a very different tune about the coffee chain’s prospects Down Under, where the brand has struggled for years to expand.

Local chief Chris Garlick revealed recently that Starbucks will open more than a dozen stores in Perth after a model focusing on convenience and drive-throughs found success on the east coast.

That would be quite a turn in fortunes for Starbucks in Australia after decades of trying to become as popular here as it became in the United States, where it has thousands of stores.

The business currently has around 70 stores across Victoria, New South Wales and Queensland, which is a much smaller footprint than successive expansion plans hoped for.

That expansion came after Starbucks closed 61 of 87 stores in the country in 2008.

Starbucks discovered a sophisticated and discerning coffee culture in Australia that rejected the company’s US-style chain model.

Independent cafes are much more common and appreciated in Australia.

Challenges for Starbucks

Consumers in North America and China are dealing with torrid economic pressures that have affected discretionary consumer spending at chains like Starbucks.

Analysts suggested that has particularly affected Starbucks because in recent years it has become a premium-priced cafe in the US.

Many of its menu choices are complex and come with add-ons that can make their coffees pricey to customers trying to cut back on discretionary expenses.

Its blended coffees in particular, when including syrups and flavourings, can cost consumers more than $9 for a large cup.

Niccol is looking to change that, telling investors that the company is working to simplify an “overly complex menu” and shift its pricing strategy to convince consumers that “Starbucks is worth it”.

But it’s not clear whether that will be enough to turnaround the chain: BTIG managing director and restaurant analyst Peter Saleh said store traffic in the US is now, outside the pandemic, the “”worst number we’ve ever seen” – even ahead of the 2008 GFC.

“I don’t know if this is a pricing problem,” he told Yahoo Finance.

“This is a messaging problem, probably a throughput problem. I think they’re working hard on the marketing. You’re already seeing some of the marketing chain changing.”

In China, things look even more difficult.

Starbucks, with its headquarters in America, is facing tough competition from Luckin Coffee, their local rival.

Luckin Coffee is up to 30 per cent cheaper and now has thousands more locations across China, allowing it to out-scale Starbucks, which has stagnated since COVID-19.