The impact of economic factors on Starbucks revenues are usually direct and paramount. Consumer buying power as a reflection of overall economic situation in the country is one of the most significant economic factors that determine Starbucks profitability. The economic crisis of 2007 – 2009 had derailed the consumer spending power to a significant extent noticeably deceasing Starbucks revenues. Specifically, by March 2008, Starbucks revenues decreased by 28 per cent compared to the previous period and the company had to close about 900 stores and lay off 6,700 employees as a direct consequences of the crisis.
Currency exchange rate is another important economic factor Starbucks has to deal with. Strengthening US dollars compared to other foreign currencies in 2014 and 2015 diminishes the profits of Starbucks and other US-based businesses operating globally. In simple terms, as USD increases in value revenues generated in foreign markets in local currencies buy fewer USD, thus diminishing the total profits.
Starbucks forecasts the strengthening USD to decrease its total revenues by 2 per cent in 2015. During the first quarter of 2015 alone, unfavorable exchange rates decreased Starbuck’s revenues by USD 92 million.[4] Moreover, the volume of Starbucks revenues is subject to interest rates, levels of inflation, unemployment rate and a range of other economic factors.