Why Starbucks is hitting the wall

I won’t miss Starbucks if they completely dissapear. Since their refusal to support the troops because of a disagreement with the administration, I have completely avoided them!

Starbucks’ closing list bears closer examination — I’m not the only one who detects something less than scientific about Starbucks “formula” for determining which stores get the axe.

When he returned to the helm of Starbucks, Howard Schultz decried the frat boy mentality that had run the company into the ground. How closely has he checked the P & L’s and Balance Sheets for the stores on the shortlist?,

I can’t go a day without coffee from Starbucks. I love their Sumatra Roast. I agree everything’s expensive there. They need to have more rewards for customers like free drinks. There’s no incentives really. You need to buy a starbucks card to get any benefit like refills or 2 hours of free Wi FI. Not bad. Could be more flexible. I don’t agree with people who said that the Lattes were a luxury drink. Most of the Lattes are water-downed milk with no taste. It helps to have a Barista that knows how to make a good cup of joe. I don’t buy lattes from Starbucks because most of the Baristas not experienced with making it. They do it all wrong. I go to a place, a small coffee shop that specializes in the arguably the world’s greatest latte. They are called Joe’s in the NY. Starbucks as a business has hit a wall as most growing comapnies do and they are trying to salvage as much as they can while the economy destroys their earnings. It’s just life.

Well, I am glad this company is dying. I love how CEOS get paid to even failing a company. I think if they fail they should get double or even triple taxed on that little package. Oh well, I guess they pay in next life. Why because in 6 mos they will be running some other business off the poor desparate people that will fight to death for $10 an hour. The president at my school was going to get starbucks for the students and hire students to work. A coffee that cost roughly less than .50 goes for $4 that includes labor and everything. No its just not at Starbucks it all these wall street traded companies. I have numerous instructors working for these companies by day. They all talk about the greed at companies these days. You wonder why robberies are up across the nation! Then again the best hope is they pay for it next life in the treatment of workers.

As someone who currently works for Starbucks as a Store Manager I’m sure most of you will discount what I am about to say as being biased but that doesn’t make it any less true…
I’ve been working in the retail/customer service field for over 15 years now and I have never worked for a company that cares so much about its Partners or devotes so much time to training and culture of serving customers. First of all it is not $4.00 for a cup of coffee. Is it $4 for a latte? Yes it is. Why? Because you’re paying for espresso, steamed milk and the experience of being able to customize that drink by telling us if you want it made with soy milk, if you want hazelnut syrup added to it, if you want it half decaf and half regular… A latte is a luxury item folks. It’s not SUPPOSED to be cheap. Considering the fact that I can’t get out of the grocery store without spending less than 40 dollars just to buy BASIC things such as milk, eggs, bread, vegetables and meats I cannot believe people are this incensed over something they don’t NEED to have.
The fact of the matter is we are not closing 600+ stores because “Starbucks sucks.” We are closing them for two reasons… the first is we expanded too quickly. Yes, bad on us, we get it. However how many of you walked into a Starbucks and complained about the line or lack of seating or us being out of a product? How many of you saw those concerns get better as we opened more stores? We met the demand at the time. The problem and second reason is the country is changing as we go into (or are already in, depending on what news program you listen to) a recession. When a gallon of gas means getting to work and that gallon of gas is almost $5 does it not make sense to anyone but me that people are cutting luxuries out of their lives?
Starbucks is being accused of being greedy which is laughable to me. As someone already pointed out, we offer FULL medical, dental, vision and life insurance to all of our partners who work an average of 20 hours a week or more. Every partner who is with the company for over a year is granted stock options they never have to put a penny into to get the profits. All part time partners are entitled to 401k and a stock purchase program. We offer tuition reimbursement, a fund to assist partners financially if they come upon hard times, paid vacation time to all partners even if they are part time and a dozen more benefits I could go on and list.
As for people complaining about letting people sit there on their laptops, you should talk with the people who are complaining if we had free wifi more people would come in to use their laptops. For those complaining we don’t manually pull shots anymore, speak with the people who complain we are not fast enough and need better machines to get people through the door faster. No company in the history of the world has ever pleased all of the people all of the time and we are no different. While we struggle to please as many customers as we can because the company honestly DOES care about their customers, the fact remains that we have shareholders to answer to and ultimately a company needs to turn a profit at the end of the day so we try and find a happy medium that will please the largest majority of the people we can find.
If you simply don’t like the coffee, that is entirely your opinion and I can’t argue an opinion with you. But please do not assume 12,000 partners are facing an uncertain job future because “our coffee sucks”. And for the record… all the partners whose stores are closing are being offered a new store if we have one within a reasonable commuting distance or a severence package, once again including our part timers. Show me a McDonalds or a Dunkin Donuts where they do THAT.

Hmmm…You didn’t even attempt to address THE number one reason Starbucks is having trouble. PRICE!! Get the prices back down to normal and then let’s talk. Go check the price of McDonald’s coffee and other drinks and you’ll see why they’re slowing killing Starbucks.

Most generous? Just ask the Troops how generous they were to them.

They are closing 600 stores and laying off 12,000 workers. Do the math, that’s TWENTY EMPLOYEES PER STORE.

No wonder they are having trouble.

I suspect a lot of other retail chains will experience similar troubles. On a recent visit to fast-growing Tractor Supply, I counted 5 employees in the store, but only ONE actually helping customers and checking them out.

Ditto for Autozone. These retail chains need better middle management (better, not MORE) to crack down on employees who are always “on break” and can’t help sell product.

How many times have you been to Starbucks, seen an army of people behind the counter, and yet waited 20 minutes for your latte?

In a boom economy, any retailer can afford such inefficiencies. In this economy, only the efficient will survive.

A coffee shop should require one or two employees at most. 5 or 10 is ludicrous. 20 is obscene.

The Mom & Pop shops will survive this downturn, ironically, as they have few or no employees to pay.

Having worked at Starbucks through college from 1997 to 2002, I have a different perspective. When I started as a barista, you were required to attend 40 hours of classroom training, which included smelling, tasting and learning about the overall roasting process. We also learned how the machines worked and how to maintain them. It was really quite impressive. And, in my opinion, at least then, the coffee was of very good quality. Even the Frappucino’s (which I despise) were made from freshly brewed double strength coffee. Now, it is a powdered solution mixed with a condensed diary product of some kind.

But around 1999 or so, the expansion of stores really took off. I would agree that Starbucks did indeed grow too quickly. But to grow that quickly and still maintain profits, it required abandoning core competencies. I saw many, many long term managers that were VERY good at their job (I’m in IT now, but my Starbucks manager often makes these people look like amateurs) leave Starbucks over their disgust of the culture change.

It is that culture change which is the true cause. I would also add that the farther away you get from Seattle (having attending management training), the more apparent this is.

People love to bash SBUX as greedy yet they are the ones who are truly ignorant. Starbucks is one of the most generous companies out there. I know from experience because I was a manager there.

Health insurance anyone? Starbucks offers FULL medical, dental, AND mental health insurance to all workers who work 20 HOURS/week or more. Mental health was particularly important to Schultz because he understood that store employees are the front-line of the company and take particular abuse from whiny, ignorant American consumers (many of them posting here with glee about making a better cup of coffee with Folgers). Name me an ungreedy American company that does that.

How about the coffee farmer? By charging more, SBUX is able to pay the farmer better. Farmers and cooperatives working with SBUX have had improvements in quality of life because of that $12LB of coffee beans.

I too feel they over-expanded but I blame Wall Street and the American way of doing business that requires constant growth at all costs so that big shareholders can sit back and collect hard earned profits of workers. We employees were happy with even the most modest growth of our stock options because we were investing for the future, not next quarter.

Finally, what was the dagger to my heart was the replacement of machines that required you to “pull” the shot for the customer with push-button gizmos. That art was taught to me by a company that went to Italy to learn how it should be done and the rich history that goes along with it. Mechanization of an art form will almost always kill the art.

Still I will always support Starbucks over McDonalds. McD coffee never can compare until they devote their souls to coffee the way SBUX does. And I always support companies that give good benefits even to the part-timer (that’s why I never set foot in Walmart). Long live Starbucks and socially-just companies like them!

Starbucks is good coffee, but way to expensive. Double shots in the can were great for a $1 each but $1.50 each no way. Discounted should be $.75. Drop prices 50% and see customers come back.

I’m sorry to hear about starbucks however
their coffee quality is far better than
what the fast food chains offer. AND FRESHER.

First off they opened up way to many stores. Why do we need one on every block? Second their product is overpriced and terrible. Their coffee is burned and their pasteries taste like cardboard.

I wish McD or DD will buy out Starbucks down the road so better coffee can be served to the masses. Their coffee is so gross it should only be sold at pharmacies as a substitute for Philips Milk of Magnesia. No wonder Starbucks is free-falling like General Motors and other greedy corporations. More power to McD and DD!

starbucks opened way too many stores. the article says it has over 7000 in the US alone. 50 states, 7000 stores. howard screwed the pooch royally on that one. if they closed 6000 stores, they would become profitable again. 600 stores will do nothing for their bottom line. they need to be more realistic. about three years ago i predicted starbucks downfall when my friend (an ex starbucks mgr) posed this question to me – “how many starbucks are in dc?” (keep in mind the population of dc is a little over 600,000.) answer: over 500 stores. howard, u must have been out your damn mind!!! the original starbucks owners defected to peet’s coffee and tea company years ago when they saw howard’s ignorance at business. maybe the consumer should too. it’s harder to find a peet’s coffee, therefore making it more attractive.

I was never a Starbucks fan whatsoever.
They were completely overpriced and
overrated. If they had held their
prices at bay they may have been able
to hang on. Like everthing else in the
country greed is always in the forefront. Besides that I didn’t like
their coffee at all.

The biggest reason for Starbucks hitting the wall is that people’s palates changed and recognized their coffee just isn’t that good.

But I find it sad that they have to close stores, not because they’re closing them, but because 12k people will be losing their jobs. Yes, Starbucks oversaturated the market with mediocre coffee. But the one thing I ALWAYS found when I just needed the caffeine and not flavor is that Starbucks employees have always given excellent customer service. That’s rare in these days.

I may not be a fan of their coffee, but their customer service is exceptional. I hold no animosity toward the company and hope to see them bounce back.

Interesting thought……….
Would you rather pay $4.00 for an overpriced cup of coffee or $4.00 for an overpriced gallon of gasoline? Unfortunately, we can do without the $4 coffee, but we can’t do without the $4 gasoline!!! Maybe our economy and high gas prices have SOMETHING to do with Starbucks’ dilema?

Starbucks coffee is decent, if perhaps slightly on the burnt side of properly roasted. The “Starbucks Experience” is absolutely miserable. Opinions vary, but this is mine. There is nothing special or luxurious about going to get coffee from Starbucks anymore. Independent coffee houses I can go to all provide a beverage that is at least as good as Starbucks, often much better tasting, and a nice environment to enjoy the coffee in. What happened to the old espresso machines where the barista had to grind beans and tamp in the grounds before brewing the shots? I’m talking about the truly hand crafted coffee that you can no longer get at Starbucks. The stuff from the automated espresso machines is terrible and there is obviously no skill involved, just put a cup under the spout and push the button. As for the stores, when you’re in an actual store and not the lobby of a grocery store, the place is loud and crowded. Between the bad music, tables and lounge chairs pushed together and people packed in 20 deep trying to get a cup to go, as well as half the store being set aside for retail to sell cups and espresso makers and other overpriced junk…..there is no experience anymore. At this rate, Starbucks has become little more than higher priced fast food, and that is not an experience I want to spend $4 for a cup of coffee.

If I were Schultz, trying to improve Starbuck’s profit margin, one of my first orders of business would be to kick out the schizoids who sit there all day with their laptops and take valuable tables away from people who’d like to buy a cup of coffee and relax for a few moments before resuming their busy day. Starbucks used to be a classy place to go. Now it’s become the Greyhound station of the new millenium.

Starbucks lost me when they put in the automatic expresso machines. No more tapping, just push a button. Starbucks coffee is now weak and unpredictable. Their stores have awful previously frozen pastries. The only thing good I can say is the store hours.

While everyone focuses on the Starbucks shock claiming the problem is oversaturation and focusing on McDonalds and Dunkin Donuts as part of the Starbucks downfall – Don’t forget that what made this coffee giant so appealing is that it was “special” when it started out and made people feel like they were getting a “luxury” product that even they could afford. They ceased to become special when they not only spread to every street corner, but they are in every grocery store, every department store, every convenience store, everywhere! They are not so special anymore – especially with generic stores that all look alike and run people in and out like any other fast food joint. The coffeehouse experience is what made them special to begin with and what ends with the independent coffeehouse keeping that “special” feeling intact. We are part of an independant coffee franchise (we roast our own coffee) and have been doing really well against our local Starbucks one block away. When you get that big, the quality of coffee suffers, the quality of the environment suffers, and the quality of service suffers.

I don’t understand why people don’t lik Starbucks for being “too big of a company” or because they are (allegedly) “trying to take over the coffee world”. This seems to be one of the main arguments against large corporations, namely Wal-Mart. Not liking a company simply for being too big or making “too much” money doesn’t seem logical to me.

However, to get back on the main subject at hand, Starbucks looks like it is in the process of slimming up its operations. The company has a strong brand image and an even stronger market share. This period of downturn for the Company may be a good opportunity to pick up SBUX at an affordible price. People are still going to chew gum, eat hamburgers, and drink coffee for the forseeable future. I don’t know first-hand about the rest of the nation, but in Texas there are still lines every morning at Starbuck’s stores all over Houston. And if you think $2.00 coffee’s are expensive, try going to the local “cafe’s” in town and they will certainly (and happily) charge you more for a lattee. So picking up a strong company like Starbucks when its down on one knee seems like a good decision over the long term. If you are a trader buying short, then that’s a different story. But if you are looking to invest in a company with a durable competitive advantage (strong brand, strong market share, high quality product, etc.) then SBUX is definately a buy.

I don’t drink coffee — tastes terrible to me, which I know places me in the minority of people in general, and who are posting here. But I have gone to Starbucks for pastries, but not anymore. Frankly, I agree that there are too many Starbucks and Seattle’s Best (a subsidiary of Starbucks) around. In my neighborhood, there are 2 Starbucks within 2 blocks of each other. Plus, the local supermarket has a Starbucks. At the local university, there is a Starbucks in the library, a Starbucks in the food court, and the food concessions at the dorms are run by Seattle’s Best, which is a subsidiary of Starbucks. Yuck, there are just too common. I stopped going to Starbucks, and I now go to a local mom and pop coffee house with just one branch, friendly service, good prices, and none of that stupid mentality of taking over the coffee world. Yuck. Schultz & company deserve some does of reality.

I can tell Ian from Portland has never owned a business.

First a lot of the economic problems in the US now go back at least thirty years. Jimmy Carter helped enact the Windfall Profits tax which ended most domestic production of oil for a number of years. His tax only produced 10% of what he projected. The US then became hooked on foreign oil.

The dot com bubble also had a major affect on the now housing bubble. Greenspan and the Fed kept the rates too low for too long giving us cheap money, devaluing the $, and fueling a stupid rise in real estate. Then people that had no business getting loans got them, did not understanding them and defaulted on loans they should have never have had in the first place. It was not Bush’s job to go to their closings, if they do not understand the agreement get a lawyer, if you can not afford $300 when buying a home then that should tell you something.

As for your continued living in Oregon that is your first mistake. I lived in the Portland for awhile and it is the most unfriendly place for business i have been. I have been to most all states but the state of Oregon has some very anti-business sentiments. Nike is the only major Company really based out of Oregon and if Knight was not a UO booster he would probably leave also. Nafta did not hurt your situation you electing liberals whom say they will provide all kinds of jobs has. Their is a reason a lot CO’s build plants in the South, it is Right to Work.

I have been an employer for over 15 years and it is expensive to employ folks. Fed Fica, Health Ins., threats of being sued for stupid reasons. I don’t blame a lot of companies for shipping jobs oversees. Try to get an American to work these days. A lot of folks expect a check but don’t want to work. I am happy my dad instilled a good work ethic in me. Most Americans these days are a bunch of lazy bums who expect something for nothing.

Oregon borders Washington and Washington has no state income tax. Where the heck you going to have your business located? Oregon as a state has stagnated. Too many “Tree Huggers” and anti-business types running the state. Also it rains six months out of the year. Oregon is pretty but you need to be able to create jobs and it needs a change to get that done or it will mire for several more years. Their are plenty of states you could move to that you could get a job really quick: Wyoming, Texas, OK, etc.

You should adapt, if you wait, you will be stuck like you are. That is why i left, and my then wife. The South is more conducive to economic growth.

Its not generous when you give away others people money.

i cannot stand the coffee at mcdonalds, dunkin donuts, etc. the only place that gets coffee right is starbucks – and it’s cheaper for a large coffee ($2.05) at starbucks than it is at DD ($2.09) so there are two reasons to go to starbucks.

When I visited a Starbuck store, I found bad service and expensive products,that combination is not good in business, and this is the result, die.

I don’t think McFake or Dunkin Dope is even worth mentioning…COME ON PEOPLE!!! Fast food and grease balls, a coffee and a biscotti are such an agreeable pair. In our hedonistic world, I do think all SBUX should have a drive thru…I think that’s what’s holding them back. What happened to the comfy couches and chairs? The live music events with no name talents? Why not offer FREE internet when Krystal Burgers offers FREE internet…? If you had FREE wireless, people would flock. Panera even has booths with easy access plugs so you can eat and cruise the net. I definitely prefer my programmable coffee maker with freshly ground coffee blends…it’s MUCH cheaper and it gives my home that earthy coffee smell I love at SBUX. Sometimes though, you just need to go to SBUX and have a java chip frap or some other nasty little drink that makes you smile all the way down to your toes. I do agree with the need for less crap between me and the counter…at times, I feel like a mouse walking through an obstacle course…I like the wall shelf displays, not those in the middle of the way displays…

From UK
Starbucks has no warm place in my heart, I liked them when they first came to Uk, Now they cheat you by underfilling their expensive cups and putting less coffee almost everytime I visited them, their shops are not clean , staff not friendly and I am sure lots of people see them as cheats.
There are other coffee shops here that have started and doing better than Starbucks because of this treatment people have received from Starbucks/cheatbucks

Check out Launi Skinner’s President and COO bio on the 1-800-GOT-JUNK? website: http://www.1800gotjunk.com/us_en/about/launi_skinner.aspx

When are companies going to learn to not be greedy? This starbucks fiasco is the same thing we all watched Winston-Salem go through with Krispy Kream Donuts. You simply cannot saturate a market with your product at every turn. Krispy Kream at Wal-Mart, Krispy Kream at the gas stations, etc. come on!! Same with Starbucks, at the grocery stores, at Wal-Mart, at the gas stations. It is called greed and it doesnt work with some high end products/food items in the US or probably anywhere else for that matter. To be truly sucessful on the products that Krispy Kream and Starbucks sells you have to make your products less availalble and charmed. You have to put these products at a different level and make it seem worth the effort. This cannot be done when everytime you turn around (in the bathroom stall) you have a cup of $4 Starbucks coffee staring you in the face. It takes away the charm and excitement that made that cup of coffee popular and worth $4 in the first place or the Krisp Kream donut for that matter.
The fact is these products are in a different league than other products because they are charmed, Americans dont pay $4 for a cup of coffee with Starbucks written on it they pay $4 for a cup of coffee because it has class and the name sets a standard. That standard is way lost when your name starts showing up at Wally world for a price that is probably too low for that standard. It is the same concept as if you started seeing brand new Mercedez down at your Chrysler/Dodge car lots and out in the Wal Mart parking lot for sale it would devalue the Mercedez Benz people would inadvertantly begin to think “hmm what a cheap car” it would make Mercedez Benz lose its charm in the name. If Starbucks wants to be profitable they have to find a way to keep that name a mark of above the rest, they have to make it more difficult to get that cup of Starbucks coffee.

The decision by Starbucks to scale back comes at no surprise given the monopolistically competitive market and economic downturn. Starbucks successfully used market characteristics and consumer behavior to its advantage over the years. But the slump has a reverberating effect on consumers’ price sensitivity across virtually all goods and services, as many are switching away from luxury items to inferior goods, which I’ve discussed on http://peppercomblog.typepad.com/ in greater detail.

I understand not everyone has to like Starbucks but you should not be happy to here about 600 stores closing because that equates to 12,000 thousand jobs LOST! Everyone one should be scared. This could happen to YOU. These are not just low wage jobs these are some middle class and high salaried jobs that will be lost.
That is not a good thing when you consider the state of this country.

When your coffee is so-so, and you charge a huge premium to keep the stock up, yes, McD’s IS competitions…as in skimming la creme, that floats Tarbux’s boat! But ‘Hot-shot’ is right about die hards; NO one who wants the Tarbux ‘experience’ would brave the tacky plastic, and hordes of young monsters, found in McD’s!

I’m not personally a fan of Starbucks coffee since I’m a coffee snob; but I hold no animosity towards the company. And when I’m tight on time and can’t stop at my normal coffee shop, I will pick up a cup of coffee from Starbucks. At least Starbucks understands customer service – a trait most companies have forgotten. It’s probably the biggest reason that I am not against them. It might not be great coffee, but I have a pleasant experience every time I go there. I hope they recover.

I’ve never been able to figure out why anybody would pay $4-$5 for a cup of coffee, part-slim milk half soy whatever notwithstanding. For that price it ought to a least have a shot of brandy in it, be served to me by a large chested woman in skimpy dress, or both. I’ve always assumed that I just didn’t get it, but maybe they were living on borrowed time and my initial instincts were right.

Jobs don’t get sucked away by NAFTA or any other free trade agreement.

Go back to school, take Econ 101, and then maybe you’ll get a regular job.

How can you call Starbucks greedy when WalMart is the biggest culprit of putting down mom/pops while paying their employees lower wages.

Starbucks and WalMart target totally different markets, yet Starbucks is the devil?

Ignorant.

Starbucks didn’t research their market well enough. Too much expansion, not enough demand, especially with prices of inelastic necessities rising the way they have. They’ll be fine. When the economy turns around their expansion will begin again.

I live in Washington DC and there is three Starbucks in a three block radius and this is just typical of Starbucks in this area. There are too many Starbucks in many areas here. This is one reason that Starbucks needs to close stores!

I live in Hot Springs Village, Ar. and recently went with a friend for a cup of coffee at one of our small restaurants and was shocked when I got my bill. For a SMALL cup of black coffee I was charged $3.00! When I go to Hot Springs(proper) I look forward to a GREAT cup of my favorite coffee at Starbucks. Please don’t close this one. It’s one of my few treats.

I want to comment on this issue. I keep hearing people say that you can get a cup of coffee that is just as good at McDonalds. I beg to differ, unfortunately there are no Starbucks in route to my university and I had to stop yesterday for a cup of iced coffee at McDonald’s, the problem with this is the kids at McDonalds don’t know the first thing about coffee and how it should be made. So I got a cup of milk and sugar and hardly any coffee. When I go to Starbucks, I get coffee. I can tell them I want non-fat milk. I can get a Caramel Macchiato, non-fat, with 3 equals. For the person that doesn’t want that, and wants “simple coffee” as I keep hearing, yay for them. Go to McDonalds or Denny’s or whatever. I don’t want that and I budget for my coffee and I enjoy it. And the person that wants McDonalds or Denny’s coffee is not the target audience of Starbucks. I will always go there and gladly spend my $4.01 for each cup of coffee because that is what I like and I am not ashamed to do it and will continue until I decide to stop. I am happy there are 3 Starbucks in each direction from my house and I hope they don’t close any of them. My community loves Starbucks! I wish them much continued success.

Starbucks’ CEO just told investors recently that competition was NOT the issue and they should ignore the stories making the rounds in the media about McDonalds, etc. Their research told them this wasn’t the problem. He said the problem was all of their own making, and then he (ridiculously, I think) touted some “solutions”: smaller coffee machines so customers can see their drink being made; and a return to grinding beans in-store so the flavor wafts in the air and will somehow entice people to spend more money. So, uh.. that’s the “fix”.

You can get better coffee at denny’s and they are open 24 hrs for a lot less money. And they have been arround for a long time. Go figure.

Our economy sucks right now, everybody knows it and feels it. If gas wasn’t five bucks a gallon, it wouldn’t be that big of a deal to stop in for a three dollar cup of joe. In tight economic times, everyone holds on to their dollars a little tighter and the critical mind wakes up- What?! Three bucks for coffee! No thanks, I’ll stick to the facny Folgers that exists thanks to the now suffering Starbucks. Maybe a name change might help…Savebucks perhaps?

It will be interesting to see where the low performing stores are located….based on the large number of customers, EVERY starbucks I have visited recently seems to be doing just fine.

I finally walked out of SBUX – literally – about 6 moths ago after being in line so long waiting for customers to make up their minds about food items, gift certificates, etc. I observed workers yucking it up with each other and the customers with little concern for those of us in line who simply wanted a cup of coffee. After several incidents like that, I’ve happily returned to local “mom/pop” coffee vendors.

In the day, there were lots of jobs, and people could afford expensive coffees, etc.

Then one day, soon after Bush II, was elected, after the infamous attack at the WTC, massive job layoffs occurred along with outsourcing of jobs and manufacturing, etc.

I have not had a regular job since 2001, that giant sucking sound was my life being destroyed by NAFTA and globalization.

I am worried about filling my stomach with what little funds I have left, much less buy an expensive crappy coffee with no free internet.

SB is just greedy, greedy, greedy. They put lots of mom and pop shops down. Sympathy for the devil.

I live in the small town of Longview, WA. We just recently got a new starbucks. Did I mention we already had 6. 4 of them are across the street from each other. You can’t stay in business when you are your own competition.

I drive through McDonalds in the morning for a better cup of coffee than Starbucks. It’s better coffee, less expensive, and less wait time.

It doesn’t surprise me there are still many ignorant people who think Starbucks charges $4 or more for a cup of coffee; they don’t, its well under $2 north or south of the boarder (the same range as everywhere else). Specialty drinks start in the $3 and up range, which many places attempt to imitate with poor quality substitutes, that cost just the same! The reason for so many locations is demand. And if you don’t care for the roasts on tap that day, get an Americano which rivals most coffee blends anyways.

So many people like Starbucks because there is (for the most part) a high quality consistency you have to pay only pennies more to experience. And if you disagree with this, just take a look at the clientele compared to, say, a Dunkin Donuts or McDonalds, who would rather get a “deal” then quality (because, when it comes to nutrition, decisions should be made over the few pennies you will save instead of what you are about to put in your mouth).

And as far as a rest stop, I’ll take a Starbucks washroom over the filthy sties at McDonalds or the like any day.

I go to Hastings for coffee and pastry because they have good pastries at affordable prices. Starbucks pastries are expensive and not what I would consider good – they are too fancy and yucky. At Hastings I can get a banana nut muffin or a chocolate chip cookie that are actually quite good and reasonably priced. The last pastry I had at Starbucks I threw away after it was half gone.

I used to drink coffee and I used to buy it at Starbucks. However, looking back, I didn’t like the wait time, I didn’t like the floor displays that made the store tight, compact and crowded. But more importantly, I really didn’t like the cost of the coffee. Even though I do not patronize the business, I think Starbucks has a good chance of surviving the lows but I don’t think they will go back to its initial highs.

the brand was built on the positioning of being the ‘3rd place’ [home, work, starbucks]. as such they did a wonderful job of optimizing a consumer’s experience in the ’90s (e.g. plenty of room, clean, music – overall great ambience).

look around today. tons of small cramped stores that are more headache than peaceful. heck, you’ll even find them in grocery stores with ‘baristas’ that cannot discern a latte from a mocha.

net/net, positioning informs everything and their lack of discipline to stay true to the ‘3rd place’ cost them dearly. no longer unique. no longer distinctive. candidly, no longer good.

long live peet’s!

duke

Starbucks has always charged a premium for a product offering that was of so-so quality. Just travel to many other countries and visit local cafes to taste really good coffee. When in Guatemala city recently the coffee at a street stall run by the impoverished locals was better than any Starbucks coffee I have had in the last 10 years. Wake up Starbucks! Quality is the key to success because quality enhances the customer experience and makes them come back.

Problem with Starbucks is simple – the coffee sucks. It was excellent in Seattle in the late 80’s. today in SF, it is a bad cuppa joe.

nobody could afford 4 dollar coffee 5 years ago, either; they just thought they could.

You’re wrong about Home Depot hitting a wall under Nardelli. The stock price peaked in 2000 due to stock bubble overvaluation, but the company’s revenues, profits, and return on assets didn’t skip a beat until the subprime mortgage crisis — AFTER Nardelli was fired.

In several of the previous comments, writers have spoken of getting acceptable coffee at McDonalds and at diners. I can’t see myself going back to those sources. Diner coffee often was poorly made to begin with, and often sits for hours, turning bitter and rancid. McDonalds coffee is hit and miss from one store to another. For someone such as I who travels a lot, it just is not acceptable to experiment time after time with a less than 50% probability of getting something worth drinking. If you want a hot meat loaf sandwich, a diner should be O.K. If you want a truly great milk shake, go to McDonalds. For rather good — dependably good — coffee, go to Starbucks.

The service level at McDonalds is far inferior to that at Starbucks as well. I never have encountered at Starbucks a bored, truculent teenager, the common “service” provider at McDonalds.

Starbucks’ expansion into other countries is a boon to consumers and should help undergird the company’s earnings as well in a period during which the dollar is continuing to slide downward (it will go a lot lower from here).

On 16th st Mall in Denver, there are 4 Starbucks within just a couple Blocks of each other. This move is a no brainer for people that thought Starbucks growth was a joke. It was just a matter of time.

OVER SATURATION! Like The Gap and others (maybe Ann Taylor’s Loft will soon suffer this fate), there are too many stores within blocks of each other. Employees’ salaries, high per square foot rent, and all the other operating costs cut into profits. If a customer wants to find a particular store, they will walk a few extra blocks. There is no need to have the same store on every other corner or every three blocks or so. Great products at reasonable prices will keep the consumer coming through the doors.

Nobody has mentioned two other factors to this decline: the cost of gas; and the factor of people brewing it up at home. If people are really consolidating their driving, then it has to beat down the numbers at SBUX. That extra $200 a month in gas expense has to be found somewhere. Perhaps McDonalds still holds court for breakfast drive-thru windows. If you can only get a sweet danish (my father-in-law hates anything sweet), then I am sure most people prefer a real meal to go with their coffee. Or in my case, Folgers isn’t doing such a bad job with their selection and taste as I grab a tub of it once-a-month during my trip to the grocery store for $8. That would be gone in 2-4 visits at Starbucks. Visit my blog at http://www.recruitu.com

Paul in Dallas hit the nail on the head. Their burnt coffee is not that good and neither is their price. The only reason the sold coffee was “snob appeal”

The “fnacy” Pike Place roast only costs $1.69 a cup so I have no clue what you’re talking about when you say they have a “fancy” price. In general though, the coffee is worse than Dunkin Donuts, this region’s competitor for coffee and breakfast items. Dunkin Donuts is actually more expensive per cup here ($1.89 for the same size) so go figure. You’re right- let’s buy shares of Sunbeam! lol

Maybe they can sue for royalties from battlestar galactica.

Maybe they’ll start making a decent cup of coffee.

Starbucks has a lot of problems but chief among them is that the novelty has worn off. And while the company educated Americans about decent coffee and espresso drinks, two things happened: a) competitors showed up and fast food places raised their coffee game as American’s tastes improved while at the same time b) Starbucks mucked everything up by becoming a kind of ice cream parlor for 2000 calorie coffee-flavored whipped cream desserts that take forever to make. I can’t stand that it takes forever to get my simple black coffee because the clogged-artery set needs to have some sort of blended sugar bomb that takes forever to make, so they’ve lost me. I was ready to be loyal too. Now I get decent coffee at a diner for less money and less wait-time. Too bad they didn’t decide to stick to coffee and keep their retail integrity. I think that may have been a less profitable stance in the short term, but they’d stay around a lot longer. Also, they were hurt by insisting on serving food and pastries when the quality of that food was (is) so terrible.

This entry makes a larger point, which is that once you’re on every corner (see Gap, Sbucks, Home Depot and countless others) how do you grow? Only a few retail companies have figured that one out.

Interesting read.

Here is the real reason why Starbucks is hitting the wall: Their coffee just isn’t that good! While their branding has been quite successful, they still have yet to make a decent cup of coffee. SBUX recently added the fancy Pike Place Roast to the menu. Now instead of selling burned coffee, they sell burned coffee with a fancy name and fancy price to go with it! I can make better brew at home with Folger’s and an old Sunbeam coffee maker. Until SBUX can start selling a better product at a reasonable price, their demise is imminent.

I was recently stunned to have been charged $3.50 (!!) for a black unsweetened iced coffee at Starbucks and since then have significantly reduced my Starbucks visits (you can too!!)

I can’t believe how long I thought I needed these things.

I do not think that you can blame Home Depot’s current problems on having too many stores. This realy is due to the current economy which would have been a problem whether they has 10 stores or 10,000.

I wonder how many of the stores the own vs lease?

Gosh, I’m not a self-proclaimed retail guru, but doesn’t it seem like in tough times people just figure out that hugely over-priced coffee drinks are not a necessity? This is the one line summary to a rather over-complex analysis.

SBUX will bring breakfast sandwiches back to all retail stores beginning in October through Spring FY09. We will not be removing breakfast sandwiches from the stores. Just as it makes sense to close 600 non-performing stores, it makes sense to sell sandwiches that increase revenues in all stores.

It never ceases to amaze me how a CEO profits upon their departure, no matter whether they did a phenominal job or were the worst CEO. Poorly performing employees get their pink slip and perhaps a handshake if they leave on civil terms. Paying poorly performing CEO’s an exit pacakge is nothing more than theft from the shareholders.

Its pretty dumb to gloat that the author predicted that growth will stall eventually for any retail company. Next, i am going to gloat that sun will rise everyday.

Infact, the author has unduly pessimistic about turnaround in Starbucks. I have already noticed trends that they are planning to expans more internationally and are shutting down low-performing stores in USA…..i am optimistic about their long term growth, both as a brand and company.