Starbucks shares tumble on fears of slowing US growth

Starbucks Corp's shares were on track for their worst one-day decline in five years on Friday as the coffee chain's latest quarterly report triggered concerns of a slowdown in sales in the United States, its biggest market.

While Starbucks' profit met Wall Street expectations in its first quarter under new CEO Kevin Johnson, the results suggested that growth in the coffee chain's member loyalty program was slowing, a trend that could impact future sales.

Starbucks' U.S. rewards membership rose 8 percent in the quarter ended July 2 — a rate that lags the 18 percent increase seen a year earlier and slower than the previous quarter's 11 percent rise.

"Customers were choosing to spend their money elsewhere, Johnson told CNBC on Friday, calling it a "short-term phenomenon."

But analysts said the slowdown was a direct result of changes Starbucks made to its rewards program, that, while benefiting the company, left many customers unwilling to sign up.

Starbucks last year tweaked the program to award customers points for every dollar spent at its cafes, a departure from its practice of giving points for every purchase, putting customers buying cheaper items at a disadvantage.
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