These graphs show how much people have cut back on visiting Starbucks — a key driver of its sudden management shake-up

Barish pointed out that many Starbucks promotions are only available to app users. Occasional customers, which the chain says it’s been struggling to retain, are less likely to have its app.

“Recognizing the premium position of our brand, we’ve been measured in our use of offers,” Narasimhan told investors last month. He said that only 14% of transactions were driven by offers — 10% for Starbucks Rewards star-based offers and 4% for price-based offers — compared to an average of 29% at competitors.

Plus, its menu could be alienating some customers. Recent innovations, like lavender beverages, energy drinks, and popping pearls, likely didn’t resonate with Starbucks’ core customers, Barish said. Starbucks, however, said drinks with the boba-inspired popping pearls have sold well.

What’s happening in China?

China, the world’s second-biggest country by population, is a huge market for Starbucks. The coffee giant has more than 7,300 stores there, nearly 20% of its global locations.

Starbucks’ comparable store sales in China have been incredibly volatile over the past five years.

This has largely been caused by changes in the number of orders, but the average ticket size has also been steadily declining over the past two years. In the most recent quarter, both the comparable transaction count and average ticket size were down 7% year-over-year.

Sales were massively affected by China's strict zero-COVID policy. But in recent months, they've been hit by cautious consumer spending and increased competition, Narasimhan told investors in July.

Luckin Coffee, its biggest rival in China, has nearly three times as many stores as Starbucks in China after monumental unit growth. But it's struggling, too, with same-store sales down more than 20% in its two most recent quarters.

"China's obviously a tough market, and it's not just Starbucks," Yarbrough said.

Starbucks added more than 800 new Chinese stores in the year to June 30. The chain has continued to grow in China "in the hope that there's some market shakeout," but in the short term, "it's a pretty tough road that they're going through right now," Barish told BI.

"They would probably be best served by slowing down the growth there and waiting for some of the shakeout that may or may not occur," he said.