Starbucks is planning to close 600 stores in the U.S., reports MSNBC. It “could eliminate as many as 12,000 full-and part-time positions as a result.” Read the press release at Starbucks.com for additional gory details.
isaacw The sad thing is that the media is reporting this as a result of the slumping economy. Though it may have a hand, the main reason is that they’ve forgotten who they are. Instead of pursuing their passion for coffee, they’ve become consumed by the bottom line, which accounts for stuff like the drive-thrus, fully automatic machines, rapid growth, careless employment, breakfast sandwiches, Pike’s Place Blend, etc. It shouldn’t be any surprise that 70% of the stores closing were opened after 2006, just after they initiated their aggressive campaigns. I hope this is a wake-up call for them. 0 Reply July 1, 2008
Austin Isaac I am inclined to agree with you. But Arizona has also seen 6 indie closures in as many weeks. 0 Reply July 2, 2008
hb Its sad to see jobs being lost, for some thats all they have for income. hopefully finding a job for them will not be hard. 0 Reply July 2, 2008
Ron Cortez I agree with the comment of isaacw, very assertive. In the case of the indie the cases may be way different. To begin, most of the coffee shops that I have helped in the past have not develop a business plan, heck, I did not have one myself when I started and I have paid dearly over the years. The coffee industry tends to attract people that are wonderful and passionate about coffee but do not prepare for the consequences of summer sales in Arizona. It is always good to have reserves for the bad months, per instance when I used to have my coffee shop I increased my inventory of paper goods through the busy months so when June, July and August roll in I had enough and purchases were lower. In any business the trick is to be proactive not reactive. Now, this does not help much to some of the coffee shops that are currently in trouble. For them I will like to say; our industry is only for brave individuals. So, this is the time to use our passion and know that the summer will be over soon. 0 Reply July 2, 2008
Kevin D. Johnson The reasons are likely multifaceted for both the corporate chains (remember when all the Coffee Bean and Tea Leaf stores started sprouting and then months later…gone) and the indie houses. What this should tell indie owners is that they are facing some of the toughest business challenges out there and the fact that they’re still in business means they’re doing a darn good job no matter what anyone else says. In fact, in light of the news regarding the 600 stores closing, this means current independent coffeehouse owners are doing at least as well if not better than the corporate chains. And, I don’t think it’s a bad thing for some shops to close the doors. We don’t know the real circumstances behind any closure and to speculate is probably not the best course of action. Some shop owners close or sell because of things that have little to do with whether or not the coffeehouse is making their numbers or whether it’s a hit or not. In the case of Starbucks, this is pure business. They’re not making their numbers, things cost more now than they did in 2006 on the wholesale end, and the market can only take so many Starbucks in one city. I agree in part that they’ve gone away from their original zeitgeist from yesteryear (whatever that was…I never understood it frankly) but likely this has a lot more to do with a public company facing pressure from its stockholders to maintain a profit and keep the stock price where it should be. 0 Reply July 2, 2008
Pierce/Bear http://news.yahoo.com/s/nm/20080706/us_nm/usa_coffeeshops_dc Interesting piece here 0 Reply July 6, 2008
The Best Cup Of Coffee Its really not all that surprising givin the decline in overall profits the company has seen in the last year. That, coupled with the loss of really seeming like it is the ‘third place’ in peoples lives. Starbucks has a long way to go in recovery if they intend to climb back to the top of the quality coffee ladder! dave 0 Reply July 7, 2008
Kevin D. Johnson You can’t be on the top of the quality ladder and mass produce a product – not in the coffee world. The 600 store closure is also likely due to the short term quarterly emphasis that is a part of all publicly traded companies. Wall Street wants results and wants it in the quarter – it makes long-range planning for public companies really difficult. Who knows, it might have been better for the market to keep some or all of the 600 stores but the way public companies work, you can’t have that much drag on your profits for too long. 0 Reply July 8, 2008
Ron Cortez Is Starbucks in the business of selling coffee or shares of the company? Perhaps both. Definitively a bad performance of the stock will be in detriment of their customer’s perception. And again who is the real customer the guy who stands in line for a frappuccino or the one that buys stock. I am not much of a financial analyst when it comes to starbucks or the market so forgive me for my simple statements. What I know is that “quality” at the level that some of us are accustomed, will rarely be found in a starbucks store. However, the level of sales in any starbucks will be very difficult to match by an indie. Lets learn of their ability to sell coffee and educate our customers to appreciate us, even better lets educate the starbucks customer and make them ours. 0 Reply July 8, 2008
isaacw I agree: For Sbux, this is purely a business decision, in the most traditional sense — and that’s what makes me discouraged. Their real customer has become their shareholder, and it shows. Sbux used to be an ideological company, which made it bodly unique and tasteful. Without their brave convictions, they’re just as susceptible to “the market” as any other publicly held company. If I was a shareholder (which I am), that would scare me — because after all, who would want to spend a fortune for just an old cup of joe? 0 Reply July 14, 2008
