Question of the day
by b | July 3, 2008 at 6:00 am
Posted in question of the day
With 37 years of growth, has Starbucks worn out its welcome?
(Previously: Starbucks to close 600 stores)
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July 3rd, 2008 at 6:22 am | Please log in to reply. | Log in to rate this comment | report this comment
In my opinion, I wouldn't say that, but the market seems to be getting fairly saturated with coffee shops. Therefore, this is just an adjustment in the supply/demand cycle.
July 3rd, 2008 at 1:20 pm | Please log in to reply. | Log in to rate this comment | report this comment
I'm not sure it's a saturation issue as much as an economic move on their part. They are only losing an overall 3% of total shops when you consider they plan to open 200 new shops. And they are only closing under-performing locations. The under-performing shops are probably not in saturated locations, but in low-income/rural areas where luxury coffee is not really on the locals agenda.
If the shops they are closing are losing money, this actually frees up capital for other ventures. I don't think Starbuck's is going anywhere, but I would like to see more mom and pop coffee shops competing. Most small ventures have better coffee.
In all fairness, Starbucks need to be given credit for closing shops that are under-performing rather than just taking the Walmart model and underpaying their employees. They have a standard of treatment for their employees that is not often seen in other large food/retail chains. Starbucks hasn't worn out its welcome at all, expect to see more of them.
July 3rd, 2008 at 7:52 am | Please log in to reply. | Log in to rate this comment | report this comment
Maybe people are waking up and realizing that $4 coffee daily is not as important to their budget. But Starbucks isn't down. They may be shrinking but they're not out. They still have yet to put a Starbucks on the moon. Yea, I won't go to that one either.
July 3rd, 2008 at 8:01 am | Please log in to reply. | Log in to rate this comment | report this comment
On television they use this story to stand as an example of how the entire economy is circling the drain.
In reality, as Dino notes above, it's just a natural part of the expansion/contraction dynamic of a large and successful company. Starbucks probably did expand too quickly into some locations that weren't sustainable. The fact that they're adding 200 new locations should tell you that this isn't purely about economics - it's about fine-tuning the mix.
That said, I hope none of my locals closes. Say what you want about them, but there's no more reliable place for a ridiculously-sized strong black coffee.
July 3rd, 2008 at 8:56 am | Please log in to reply. | Log in to rate this comment | report this comment
I'd imagine that sales of coffee at 7-eleven are up. People still need their caffeine fix, but you can't fuel your car with $4 cappucinos when gas has risen $2.70 per gallon with Forrest Gump in office.
July 3rd, 2008 at 8:57 am | Please log in to reply. | Log in to rate this comment | report this comment
Someone should plot a trend graph: cup of coffee vs gallon of gas.
July 3rd, 2008 at 9:42 am | Please log in to reply. | Log in to rate this comment | report this comment
I don't think it's so much that Starbucks coffee is expensive. I think it's more that Starbucks coffee and the people who drink it are perceived to others as elitist. Dunkin Donuts is growing, and they've more recently expanded their coffee menu to resemble specialty coffee drinks. But with their all-American everyone-can-drink-Dunkin-Donuts coffee marketing scheme, they're more accessible to the everyman.
And for the record, I go to Starbucks everyday and I never pay $4 for a drink. But the fact that people think that us Starbucks drinkers are all brats who buy $4/drink coffee recipes is precisely the reason that 600 locations are closing.
July 3rd, 2008 at 11:02 am | Please log in to reply. | Log in to rate this comment | report this comment
The coffee that comes out of my pot is much cheaper. And I've learned to love it. In the words of Garrison Keilor: "Starbucks made coffee a luxery simply by trippling the price".
Oh and sorry. I honestly don't know the real price of Starbucks coffee but even $1 a day is still too much for the home brewer.
July 4th, 2008 at 10:51 am | Please log in to reply. | Log in to rate this comment | report this comment
Yes, I agree, but when you wake up late and need to pick something up, thank god for the places like 7-Eleven and Royal Farms that have cheap but decent coffee.
But I agree 100%, home brewing is the way to go, especially when you do it properly.
July 3rd, 2008 at 12:29 pm | Please log in to reply. | Log in to rate this comment | report this comment
I have never liked their coffee. I'll take my Folgers or Dunkin' Donuts any day.
July 3rd, 2008 at 1:24 pm | Please log in to reply. | Log in to rate this comment | report this comment
Folgers is gross. DD's coffee is ok but can be burnt sometimes.
Caribou Coffee rocks.
July 3rd, 2008 at 1:56 pm | Please log in to reply. | Log in to rate this comment | report this comment
Yeah Folgers is straight nasty.
July 3rd, 2008 at 1:06 pm | Please log in to reply. | Log in to rate this comment | report this comment
OK, here's my thing. I love coffee and I can drink any brewed kind there is.
But a year or so ago, I visited Starbucks for the first time ever. And, with a long line behind me, I panicked at all the choices and chose at random from the menu -- an Iced Caramel Macchiato (skinny decaf) and...
it was crazy good. Like ice cream. OMG. Now I'm hooked. See, that's how it starts.
Anyhow, I only let myself have one every few weeks (cuz it's like ice cream in calories & fat grams, too, I'm sure). But wow, it's good.
That's why I go to Starbucks.
July 3rd, 2008 at 1:59 pm | Please log in to reply. | Log in to rate this comment | report this comment
I for one order my coffee via Amazon at roughly $8.00 a pound for some of the best coffee in the world, and even that averages out to like 50 cents a cup. I understand the draw for specialty drinks like Iced Caramel Macchiatos but why the HELL would you pay $2.25 and up per cup for their burnt sludge?
July 3rd, 2008 at 2:25 pm | Please log in to reply. | Log in to rate this comment | report this comment
We pay because we've already been sold on it...Like bottled water. Oh, and Starbucks don't put the Frangelica in their coffee. Top "o da mornin' to ya!
July 3rd, 2008 at 4:52 pm | Please log in to reply. | Log in to rate this comment | report this comment
next door millionare says: "don't spend more than $x.00 for a small cup of coffee." that equals to "don't buy starbucks." that's why i cut starbucks out of my budget. i know i'm only one of many ex-starbucks, but i'm sure this theory contributes to something.
July 4th, 2008 at 10:49 am | Please log in to reply. | Log in to rate this comment | report this comment
YAY! Your name is Totoro!
That just made my day!
July 4th, 2008 at 4:41 pm | Please log in to reply. | Log in to rate this comment | report this comment
you KNOW totoro??? yay! i'm happy.
July 5th, 2008 at 1:51 pm | Please log in to reply. | Log in to rate this comment | report this comment
Let's hope NOT! If I have to go back to weeny coffees (McDonalds, Dunkin' Donuts, 7 Eleven to name a few), I might have to start brewing at home to get that rich bold taste.
July 6th, 2008 at 4:18 am | Please log in to reply. | Log in to rate this comment | report this comment
i got a k-cup brewer for christmas and they brew perfect single cup coffees and teas. it's fairly expensive investment, but it makes me feel good that i don't have to buy starbucks. you can brew all kinds of coffees and teas of your likings.