IHT: Starbucks done in by chain sprawl
Under the headline Poor real estate decisions, not bad coffee, hurt Starbucks, the IHT analyzes the recent decline in fortunes of the ubiquitous coffee retailer.
Though the flagging economy and soaring gas prices are responsible for at least some of Starbucks's woes, interviews with commercial real estate brokers nationwide who work with the chain suggest another aspect of the story. These people say that the company was so determined to meet its growth promises to Wall Street that it relaxed its standards for selecting new store locations.
In some cases, brokers say, Starbucks misjudged the risks of putting stores close to each other, leading to the decline in same-store sales that the company started reporting for the first time in its history this year.
Or maybe the world didn't really need eight Starbucks within one block of Grand Central Station, who knows?
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Business
IMHO
Submitted by Dan Jacoby on 5 July 2008 - 2:47pm.
Paying anything for coffee is a waste -- it's a vile, disgusting substance. But if you're actually going to drink that horrible stuff, why punish yourself further by paying more than half a day's wages (in most of the world) for one lousy cup?
Coffee
Submitted by ROSALIE907 on 6 July 2008 - 1:12pm.
I'd have withdrawal without my morning coffee but I will admit that I've cut back a lot on the amount I drink. My memories of my childhood are waking up to the smell of coffee. I cannot drink milk because of the lactose and when, as a child, this was discovered our family doctor told my mother to give me either coffee of tea and my Mother selected coffee. Look, I grew up in an Italian household where coffee was the staple of our breakfast, where you had coffee and dessert and that habit will be with me forever but now I have the dessert and skip the coffee lol.
Either way, I find it stupid to spend $4.00 for a cup of coffee because it's from Starbucks. In fact, I don't even like their coffee and flavored coffees are the worse.
Happened before
Submitted by mole333 on 5 July 2008 - 7:15pm.
When I was a lad in Los Angeles there was a restaurant called "The Good Earth." Good health food kind of stuff. Even my meat loving brother liked the place. It was one of the few places my grandmother would actually eat a good quantity of food (she was a coffee lover, food hater). They were successful. So they started spreading. More and more of them cropped up. They spread like crazy.
Then they crashed and burned. They disappeared faster than they spread until even the original one disappeared. I think some survived on the margins of the LA/Santa Barbara food scene, but I hadn't seen them for years.
Then, last time I was in LA, I noticed they were back in Westwood where I first encountered them. More or less the same as when my grandmother took us there as teenagers.
Starbucks will survive. They grew with the economy...now they are crashing with the economy. I suspect they will weather it, particularly since they still seem to be doing fine in places like Park Slope where people still have some money. But they may never again be the Borg of coffee houses.
700,000
Submitted by Gothanonymous Reader (not verified) on 10 July 2008 - 4:35pm.
700,000 people walk through GCT every day--roughly the equivalent of San Francisco and more than four states and the district of Columbia.
It may be kind of crazy to watch on foot, but it's not as crazy a business decision as one might think.
Or Maybe
The public is realizing that after filling up their cars at 2 or more times the amount they were paying last year and paying twice as much this year for groceries than last year a $4.00 cup of coffee is the last thing they need.
Where I work there's a Starbucks right across the street from me where I can easily get that $4 coffee. Instead I go to a Coffee Shop where I pay $1.50 (with tax) for a medium sized regular coffee. Savings to me is $2.50 PER DAY and the coffee is good also.