News: Why Starbucks' sales have gone cold (bankruptcy, loans, insurance)

[southdown]

Recently coming bottom in an independent UK taste test of the main coffee chains, the US giant has seen its sales fall in its main home market for the second quarter in succession.

BBC NEWS | Business | Why Starbucks' sales have gone cold

[BlueWillowPlate]

Hmm.
I am no genius (and certainly no businesswoman), but I saw this coming a long time ago--probably about the time I quit purchasing coffee at Starbucks.
Mostly I am interested in trying to buy locally, and when Starbucks became ubiquitous (on top of developing that burned-tasting roast) it was indeed a turn-off.
The question, to me, is why? Why did they ruin a good thing for themselves by over-extending the company? Was it simply greed?

[julebuggy]

Originally Posted by southdown

Recently coming bottom in an independent UK taste test of the main coffee chains, the US giant has seen its sales fall in its main home market for the second quarter in succession.

BBC NEWS | Business | Why Starbucks' sales have gone cold

One reason Starbucks may be doing poorly:

During a recession, which I believe we're already in, it's easier to give up a $4 cup of coffee than most other luxuries.

[BlueWillowPlate]

Originally Posted by julebuggy

One reason Starbucks may be doing poorly:

During a recession, which I believe we're already in, it's easier to give up a $4 cup of coffee than most other luxuries.

Yes, the article mentions that in the third or fourth paragraph.
While Starbucks is undoubtedly being hit by the wider slowdown in consumer spending in the US, analysts say the problems at the company run much deeper.
I never bought coffee by the $4 cup there, to me that was crazy back then, and crazier now. When I shopped at Starbucks, I was just buying beans.

[70Ford]

Starbucks coffee tastes like crap. I live in Seattle, so this gives me much street cred. LOL.

[Philip T]

Yeah, ok. Does not take a lot of graphs, charts and studies to figure this one out.

That fad is on it way to over. And so it is on the path of $200 sneakers.

At the end of the day, you can only find so many folks dumb enough to part wiith $5 for a cup of coffee. And siince fools and money eventually do part, even they were bound to run out.

Would be an interesting graph to see the relation of Starbucks regular customers and holders of Adjustable Rate Home loans.

On a good note, Starbucks did bring up the standards and expectations of what coffee should be for operations such as 7-11, McD, and the Quicky-Mart.

[Niners fan]

I am a small business owner with about 30-35 employees. I offer health insurance to about half of them. I remember about 2 years ago my dad mentioning to me that Starbucks offered health insurance to all their employees, including part-timers. I responded that that was one reason their prices were so high. This is a good example why businesses have to keep costs down to remain competitive.

Plus there are just too many stores. I live near a town of about 50,000 in Southern California. This is not a suburb or a hip town but there are three Starbucks on the main strip within 2 miles of each other. They space these things like someone is going to get the urge for Starbucks but they might go somewhere else if they have to drive 300 yards instead of pulling into the next parking lot.

[lchoro]

A lot of people drink coffee for the stimulation. If they're getting squeezed by higher costs, they will switch to a brand that costs less. If you put enough cream and sugar into them, a lot of coffees are tolerable.

[jhlcomp]

Some of the best coffees I have had were in Ireland (some will be suprised, but it's true), Italy, France and Germany. And, there wasn't a Starbuck's in sight. I will never quite understand why so many are so enamoured with Starbucks.

If you think about European culture with outdoor cafes or cafes in general - well, the US didn't have that until the arrival of Starbucks. Yes, there were a few around, but you get my drift. Then Starbucks needed to grow expodentially - why?? I get the business of it, but the sheer saturation is beyond comprehension. And, in the end, the coffee is not something I would ever go out of my way for plus given the excellent cafes and Konditories in Europe - why go to a Starbucks?

[Philip T]

Originally Posted by jhlcomp

Then Starbucks needed to grow expodentially - why?? I get the business of it, but the sheer saturation is beyond comprehension.

It is not just Starbucks. At every level whether pitching to the bottom or the top. Whole mindset of the moron business class running America (into the ground) Goes the same with the housing market overbuild and Wallymart and all the other CrapMarts.

More and more and more is better. It HAS to be. I can only big a bigger (better) boss if I have more under me. Joke version is "We lose money on every sale, but we make up for it in volume."

Totally misses the concept of profitable business. Many businesses expand WAY beyond their maximum profitable point and just collapse. Anymore, I usually sort of laugh when I see it happening, and figure I will see them again at their bankruptcy auction.