Andrew Buckley, a self-proclaimed mocha enthusiast, recently gave up his Starbucks habit. He was shocked when the latest price hike pushed the cost of his drink to over $6.

At 50 years old and working in tech sales in Idaho, Buckley had been a loyal customer for decades, considering his near-daily mocha a small luxury that gave him a brief respite during his workday. However, the recent price increase was more than he could tolerate.

“It was the last straw for my general feeling about inflation. It was like, ‘That’s it. I’ve had enough,'” said Buckley, who first contacted customer service before airing his dissatisfaction on social media. “I just lost it,” he added. “And I don’t plan on going back.”

Buckley’s decision highlights the broader challenges Starbucks currently faces. The company is grappling with growing resistance from customers unhappy with price increases, while also contending with union disputes and protests related to the Gaza conflict, which have led to boycott calls damaging its brand.

Globally, Starbucks’ sales fell by 1.8% in early 2024 compared to the previous year. In the U.S., its most significant market, same-store sales declined by 3%, marking the largest drop in years, excluding the pandemic and the Great Recession periods.

Among the defectors was a group of highly loyal customers—members of the rewards program—whose active numbers saw a rare 4% decline from the previous quarter.

David White, another former frequent customer, has almost entirely stopped his Starbucks purchases in recent months. He even abandoned orders mid-purchase, shocked by the high totals in his cart.

White explains that his frustration with price increases was compounded by other company policies, such as its crackdown on employee unionization efforts. “They’re getting too full of themselves,” said the 65-year-old Wisconsin resident. “They’re trying to exploit their regular customers and profit off their employees and pricing.”

For Andrew Buckley, his decision to abandon Starbucks was primarily driven by price increases, but he also noted that the turmoil surrounding the company’s political controversies left a bad taste in his mouth. “This is a coffee shop. They serve coffee,” he said. “I don’t want to see them in the news.”

During an earnings call to discuss the company’s latest results, Starbucks CEO Laxman Narasimhan admitted that sales were disappointing, citing more cautious customers as a factor but also acknowledging that “recent misinformation” had impacted sales, particularly in the Middle East.

Narasimhan defended the brand and announced plans to revitalize the business with new menu items like bubble tea and pesto egg sandwiches, improved in-store service, and a series of promotions.

This week, CFO Rachel Ruggeri stated that Starbucks is seeing signs of recovery, particularly with growth in active rewards program members.

Despite the challenges, the company has no plans to pull back on its expansion strategy. However, Ruggeri cautioned investors that overcoming these obstacles won’t be quick. “We believe this will take time,” she said.

The difficulties faced by Starbucks have sparked debate about whether they could signal that consumer spending—an essential driver of the world’s largest economy in recent years—is losing steam.

Like Starbucks, several other major fast-food brands, including McDonald’s and Burger King, have also experienced a decline in global sales and are responding with discounts to rekindle consumer enthusiasm.

However, many analysts believe Starbucks’ sales slump reflects more about the company itself than the broader economy.

“When we look at the magnitude of the shift that’s happened in a short period, it typically doesn’t point to something macro or price-related,” said Sharon Zackfia, consumer sector lead at William Blair, an investment management firm. In a recent note to clients, Zackfia raised concerns that the brand may be losing its appeal.

This situation suggests that Starbucks’ challenges may be company-specific, highlighting internal issues beyond general economic conditions.

Starbucks was already under pressure due to a prolonged dispute with union organizers, who raised concerns about wages and working conditions, clashing with the company’s progressive reputation.

In late October, the situation escalated when Starbucks sued the union over a social media post expressing “solidarity” with Palestinians. This placed the company at the center of debates surrounding the Israel-Gaza war, triggering global boycott calls.

Although Starbucks is not the only American brand facing backlash over this issue and is not targeted by the official Boycott, Divestment, and Sanctions (BDS) movement, the company blamed misinformation for misinterpretations of its stance. It later issued a general statement condemning violence in the region.

Recently, Starbucks adopted a different approach to its union dealings, with both parties issuing joint press releases claiming progress in contract negotiations. However, boycott calls on social media increased in January and persist, according to Bank of America analysis.

Last month, YouTube comedian Danny Gonzalez apologized to his 6.5 million followers for the accidental appearance of a Starbucks cup in one of his videos after facing backlash.

While Starbucks executives have remained silent on the issue during sales discussions, Zackfia remarked, “You’d really be burying your head in the sand not to think it had some effect.”

Initially skeptical of the boycott’s impact, Bank of America analyst Sara Senatore has since reconsidered. She noted that other factors seemed insufficient to explain such a sudden and severe sales decline, emphasizing that Starbucks’ price increases aren’t particularly different from its competitors.

These developments suggest that the controversy surrounding the brand—including social media backlash and boycott calls—likely played a significant role in the company’s recent performance.

She believes a quick recovery may be challenging, comparing the impact to the crisis Tex-Mex chain Chipotle faced after E.coli outbreaks in its stores, a problem that took years to overcome.

“You can only try to drown out the noise or essentially overcome it with other initiatives,” she said. “It may just be a matter of time.”

On a recent sunny day in New York, where Starbucks’ café density is among the highest in the world, assessing the business’s state was difficult. Some stores appeared empty, only for mobile order customers to break the calm as they entered to pick up their drinks.

Even loyal customers noted room for improvement. Maria Soare, a 24-year-old Washington, D.C., resident, still buys Starbucks drinks three or four times a week, but her frequency has decreased since the pandemic, when visiting the store gave her a reason to leave home. She noted that the recent price increases “hurt” and suggested the company “improve the food.”

For friends Veronica and Maria Giorgia, the company’s vibe has changed. Sixteen-year-old Veronica said she no longer visits as much due to a mix of better alternatives elsewhere, price hikes, and recent labor activist protests. “It opened my eyes,” she said. “It feels more like a chain.”

While Maria Giorgia, 17, remains a regular customer, her perception of the company has shifted. “It used to be cool in high school. Now it’s just convenient.”