Starbucks Corp., the world’s largest coffee-shop operator, said that their second-quarter profit fell 77 percent. It  announced it would open fewer stores than planned this year. the key reason : consumer spending has declined.

Starbucks Net income dropped to $25 million, or 3 cents a share, in the three months ended March 29, the Seattle-based company said today in a statement. Starbucks will add 20 locations this year, down from the 95 it predicted in January, as it seeks to cut $500 million in costs through September.

Chief Executive Officer Howard Schultz said that Starbucks is fighting the perception that Starbucks’s coffees are a luxury as consumers cut store visits amid the longest recession since the postwar era. The coffee seller is facing competition from McDonald’s Corp. and Dunkin’ Donuts Inc., both of which sell cheaper versions of coffee.