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  1. #1
    Merchant & ABW Ambassador
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    Starbucks profit falls, close stores in U.S.
    With this thread about Starbuck (http://forum.abestweb.com/showthread...6&page=1&pp=25) starting from posting 10, they are not doing too well in US.

    http://www.latimes.com/business/la-f...,7643589.story

  2. #2
    Ride It Like You Stole It CowgirlUp's Avatar
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    Interesting. The Starbucks story and business model is used consistently as an example of free enterprise in my classes so it's gonna be interesting to see this play out over the next year.

    So many of the big businesses are suffering right now. I was shocked to hear that Wendy's is going to be bought out by Arby's. Pretty sad. Sky Bus, another Columbus based company, closed down a few weeks ago leaving many passengers stranded. Scary Stuff
    Be the change you want to see in the world ~ Gandhi

  3. #3

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    It would probably help to get rid of some of the saturation. In a rural area near where I live there are 5 starbucks in a 3 mile radius. Is that REALLY necessary? Considering Starbucks doesn't franchise it's stores they are all company owned then I would think they would have a little better planning.

    I have also seen a Starbucks right across the street from another Starbucks, and many times ones ONE block down from each other. To me, for a premium store, that is a bit much. I think they SHOULD close some stores.

  4. #4
    Grandma broke her coccyx! Uncle Rico's Avatar
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    They must be having a hard time competing with McDonalds gourmet coffees, which are priced much less.

  5. #5
    ABW Founder Haiko de Poel, Jr.'s Avatar
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    If you've noticed they've started [since the pikes place intro]to aerate the lattes so that you actually get half the product (milk or soy) while still keeping the same prices. The problem isn't necessarily the over saturation but more a loss of focus, the music, the gear, the coffee the breakfast, etc.. They are a premium coffee and destination store not a DD / McD alternative, trying to market it that way is doing the starbucks brand an injustice. DD and McD are good coffees but they don't make a real latte nor offer soy, so I think they denigrated the brand by offering the pikes place low end coffee and while offending their core - the latte crowd by skimping on a $5 latte.

    </end rant>
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    Haiko
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  6. #6
    Affiliate Manager Howard Gottlieb's Avatar
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    No one dominates a niche indefinitely - especially a premium priced brand in a slowing economy.
    I would rather live my life as if there is a God and die
    to find out there isn't, than live my life as if there
    isn't and die to find out there is.

  7. #7
    ABW Ambassador AffiliateSummitMissy's Avatar
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    This was actually one of the signs that I was looking for when it came to me truly acknowledging that the economy is in the shi**er.

    It's a sad day.
    Shine on,


    Missy Ward

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  8. #8

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    I disagree. I believe they have also reached a "saturation point". There are just too many stores in a radius area and that can't be maintainable even if the economy was in the best shape in the world. There is such as a thing as over expansion.

    I also don't believe McDonalds gourmet coffee has affected them at all (or very little). Several reasons in my opinion. First, it's not fully available at every McDonalds and two it's still relatively new in the field. Starbucks has had competition for some time but none come close to the quality they serve or their atmosphere. I also don't think the clients are exactly the same as McDs.

    I used to own a coffee/espresso shop in the Seattle area. It was one of the more enjoyable businesses I have owned. Too bad we moved to another state.

    Though I wouldn't worry about Starbucks. Closure of stores is a good thing due to the over abundance of their stores. One bad report isn't going to sink a company or one reported loss.

  9. #9
    Life is Supposed to be Fun! Rexanne's Avatar
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    Quote Originally Posted by Haiko de Poel, Jr.
    The problem isn't necessarily the over saturation but more a loss of focus, the music, the gear, the coffee the breakfast, etc..
    One of the wisest pieces of advice I ever got was: "Know who you are" in business. Trying to be all - do all will dilute hard-earned branding and lose focus on what made a business successful to being with.

    And yeah, there is a Starbucks on every freaking corner in Los Angeles which is just stupid. Nice if you're having caffeine withdrawals but ridiculous for a business model. They diluted themselves.
    Peace,

    Rexanne

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  10. #10
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Quote Originally Posted by nakedgamer
    It would probably help to get rid of some of the saturation. In a rural area near where I live there are 5 starbucks in a 3 mile radius. Is that REALLY necessary? Considering Starbucks doesn't franchise it's stores they are all company owned then I would think they would have a little better planning.

    I have also seen a Starbucks right across the street from another Starbucks, and many times ones ONE block down from each other. To me, for a premium store, that is a bit much. I think they SHOULD close some stores.
    A couple of miles from here, there is a one-level outdoor mall - not small but not gigantic either - where they recently opened up a 3d Starbucks, all in the same mall.
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
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  11. #11
    ABW Ambassador bettylou's Avatar
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    There is even a Starbucks in my small town. They built last summer right next to the only coffee shop that we had. Drove them out of business. The thing is that that original coffee shop was owned by a well-known, well-liked lady in town.

    Starbucks was a status symbol in the beginning, at least, it was here. When they first came to town, other moms would show up at all the ballgames, events, whatever, with their lattes in a Starbucks cup. This was to show they were cool enough to drink Starbucks.

    My opinion, for what it's worth, is that with some many venues to get Starbucks (every street corner, the supermarket, the convenience store), it is no longer a "rich man's coffee". But it still comes with the rich man's price. The status attachment isn't what it was, so why bother.

  12. #12
    ABW Ambassador Daniel M. Clark's Avatar
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    Comedian Lewis Black did a bit on one of his CD's about the Starbucks that was across the street from a Starbucks in Houston, Texas. I used to live in Houston, and I used to visit the movie theater that was next door to one of those Starbucks every Saturday night at midnight (some of you will understand the significance of that day and time ).

    I agree that saturation is a problem for them. They're out of control. Since my time in Houston, and that was more than 10 years ago, I've lived in other places that had the same situation. I've seen Starbucks across from Starbucks, Starbucks a block away from Starbucks and multiple Starbucks in the same shopping mall. The only thing I haven't seen is Starbucks inside of Starbucks, but if not for the economic downturn, it probably wouldn't have been too far off.

    I also agree they fell victim to what they call "feature creep" in the game design industry. That's when you're working on a product, you've got a plan, but then you have a great idea and you sacrifice the cohesiveness of the plan to get that cool idea into the game. They shouldn't be competing with Dunkin Donuts and McDonalds, because it's like the Apple store trying to compete with Walmart. Why bother? Despite the fact that they both sell coffee-based drinks, they're not direct competitors in the minds of most people.

    I think, ultimately, that Starbucks simply lost their focus and they're paying for it now.
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  13. #13
    Newbie blaine1tech's Avatar
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    In a mall here there is a Starbucks with a storefront on the second floor in the middle part of the mall, the food court is two stores down. If you take the escalator that is right in front of this Starbucks to the first floor your at the downstairs Starbucks...seriously, it's an escalator you don't even have to exert energy to get up it.

    So basically they're in every corner of every mall, in buildings on every other block around the mall one has a drive thru and the other doesn't, in the Target across the street. I'm with BettyLou it became too accessible and lost its pish posh persona.

    I am just going to be honest...I don't even like Starbucks coffee! Their mass production and roasting really shows through in the overall quality of their product.
    When I was out in LA i loved a small chain, Diedrich coffee. They closed both the Malibu and Santa Monica store! The SM one was replaced with a Starbucks one block away from the other Starbucks.

    I miss Diedrich's

  14. #14
    Outsourced Program Manager Jorge - SHOPiMAR's Avatar
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    They lost their focus. The original founder took over again and wants to go back to and create things how they used to be, selling coffee. He wants to do away with all the extras and concentrate on coffee and just introduced an new blend that is even better.

    Atleast that is what he said in an interview I saw a few days ago in a one hour interview on pbs.org with schultz original CEO who recently returned on this, and he said that starbucks problem was that it years on too much growth and not enough on coffee and it's customers.

    btw, I only drink Cafe at home and don't own their stock.

  15. #15
    ABW Ambassador Daniel M. Clark's Avatar
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    Maybe he'll be able to turn it around like Steve Jobs did for Apple. Never know.
    Daniel M. Clark
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    Greg Hoffman Consulting

  16. #16
    What's the word? Rhia7's Avatar
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    I miss Chock Full of Nuts

    http://en.wikipedia.org/wiki/Chock_full_o'Nuts


    It had good coffee and everything was reasonably priced

    I remember the jingle on the radio too advertising the coffee.
    Last edited by Rhia7; May 2nd, 2008 at 12:19 AM.
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  17. #17
    Life is Supposed to be Fun! Rexanne's Avatar
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    Quote Originally Posted by HecticDMC
    Maybe he'll be able to turn it around like Steve Jobs did for Apple. Never know.
    I'd bet on it.
    Peace,

    Rexanne

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    Loving Everyone's Child Creates Magic


  18. #18
    ABW Ambassador AffiliateSummitMissy's Avatar
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    I get the saturation thing. There's no question about it.

    That being said, I politely disagree that it's the only contributing factor.

    My grande skinny latte costs me as much as a gallon of gas each day. That's about 100 bucks a month in latte at one cup per day. And there are days when I just need to have two.

    If I was put into the position where I had to decide whether to get my caffeine fix or put gas in my car, my Starbucks crush would be the first to go and I'd be making my crappy coffee at home.

    I have a feeling that a lot of Americans are thinking the same way.
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    Missy Ward

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  19. #19
    Antisocial Media Expert ProWebAddict's Avatar
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    I tend to frequent coffee shops with free wi-fi. That tends to be the smaller, independent ones. In addition to the wi-fi their coffee tends to taste better.

  20. #20
    ABW Ambassador bettylou's Avatar
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    Quote Originally Posted by AffiliateSummitMissy
    If I was put into the position where I had to decide whether to get my caffeine fix or put gas in my car, my Starbucks crush would be the first to go and I'd be making my crappy coffee at home.

    Ahhh! But what if you were put into the position to decide between gas in your car and Coast Original Scent soap in the shower?

  21. #21
    ABW Ambassador AffiliateSummitMissy's Avatar
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    Quote Originally Posted by bettylou
    Ahhh! But what if you were put into the position to decide between gas in your car and Coast Original Scent soap in the shower?
    Coast --- and I'll take my bike!
    Shine on,


    Missy Ward

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  22. #22
    Analytics Dude Kevin's Avatar
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    Starbucks premium coffees are like $76.00 a gallon. Gas is $3.79 a gallon here. I know which gallon is coming first in my book.

    Just so happens that where I buy those gas gallons, I can get a Less Than Premium (TM) coffee for $.79.
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  23. #23
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    Every personal finance guru has been telling people to give up their starbucks coffee and invest it for the last 5 years. Eventually people understand what they are hearing, when their finances start to stress because of necessities.

    Also the "have to be cool crowd" is fickle and not loyal over the long term. Fifteen years ago they were paying way to much for gourmet ice cream cones.

    Because Barnes & Noble cafe sells starbucks products, I get frappucinos for 50% off. Almost passed out when I went to a starbucks and paid full price!

  24. #24
    Life is Supposed to be Fun! Rexanne's Avatar
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    Quote Originally Posted by ProWebAddict
    I tend to frequent coffee shops with free wi-fi. That tends to be the smaller, independent ones. In addition to the wi-fi their coffee tends to taste better.
    Starbucks basic American coffee is nasty stuff. I wouldn't touch it - what makes Starbucks good for me is the lattes and cappucinos. I think their forte is the espresso drinks which are good and the espresso is tasty, not bitter or burnt like their basic American coffee blend.

    Meanwhile, they've "taught" other coffee places to serve espresso drinks and that's a good thing.

    Yeah, their prices are just stupid. I have a cappucino maker at home and make mine all day long but if I'm out and about and need a fix, I'll spend the dumb price for a latte. Not on a daily basis though. In Vegas I was on those Starbucks stores first thing in the morning and grateful they were at key points throughout the hotel. There were at least 2 Starbucks in the Rio and I'm sure they have the same set up in other large resort and vacation hotels - that kind of saturation is pretty amazing, really.
    Peace,

    Rexanne

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  25. #25
    I like traffic lights
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    Quote Originally Posted by HecticDMC
    I used to live in Houston, and I used to visit the movie theater that was next door to one of those Starbucks every Saturday night at midnight (some of you will understand the significance of that day and time ).
    You've arrived on a rather special night. It's one of the master's affairs.

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