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Does Starbucks Need a Facelift?

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It's no secret that Starbucks (Nasdaq: SBUX  ) has been more into shuttering shops than opening new ones here lately, but it does have one interesting initiative up its sleeve, and that's giving some stores individualized, eco-friendly facelifts as well as seeking some additional green credentials.

According to The Seattle Times, Starbucks' plan is to use local and environmentally friendly materials that bring to mind the particular neighborhoods where the stores are located. Examples so far include its store across from Seattle's Pike Place Market, which has a coffee bar that utilizes scrap leather from shoe and automobile factories as well as cabinets made from fallen trees in Seattle.

In addition, Starbucks plans to seek LEED (Leadership in Energy and Environmental Design) certification for all of its new company-owned stores beginning next year. (I recently wrote about how McDonald's (NYSE: MCD  ) received the platinum-level LEED award for its headquarters, in fact -- talk about surprising green shoots from big blue-chip companies.)

I've always thought Starbucks did a fairly good job of having some degree of variety and distinction in its stores, but this plan does sound like a greater step in the spirit of "uniqueness," which would be important as Starbucks seeks to retain its differentiation. This sense of differentiation is arguably an important concern, since Starbucks has been doing an awful lot of things lately that might remind one just a wee bit too much of Mickey D's and could possibly tarnish its brand.

The LEED certification is interesting, though, and gives me pause; Starbucks has always given off an air of green and sustainability, so it seems a bit odd that it doesn't appear to have gone for this particular initiative till now (a time when store openings are not a major part of its plans!).

Whole Foods Market (Nasdaq: WFMI  ) has long focused on such initiatives, having received the Environmental Protection Agency's Green Power awards for four years; its flagship store and several others are LEED-certified, and according to its most recent Form 10-K, it has about 20 stores registered to become LEED-certified.

Personally, I think anything Starbucks can do to continue differentiating itself from rivals like McDonald's, Dunkin' Donuts, Caribou (Nasdaq: CBOU  ) , and Peet's (Nasdaq: PEET  ) is a good idea, and an emphasis on the LEED certifications seems like a good move, too, as more and more consumers like the idea of green building. Feel free to share your own views in the comment boxes below, though -- will such moves help Starbucks, or do they sound like a waste of precious time and money?

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Starbucks and Whole Foods Market are Motley Fool Stock Advisor recommendations. Starbucks is a Motley Fool Inside Value pick. The Fool owns shares of Starbucks. Try any of our Foolish newsletters today, free for 30 days.

Alyce Lomax owns shares of Starbucks and Whole Foods Market. The Fool has a disclosure policy.


Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 26, 2009, at 5:42 PM, 102971 wrote:

    I don't think that changing the look of the OUTSIDE of their stores is going to help as much as changing what they do INSIDE the stores.

    The fact is that they are no longer unique and their prices are too high, particularly for the food items. $2+ for a donut is ridiculous when I can buy the same donut for 70 cents less than 100 yards away.

    No way is this going to improve their profit performance and thus their share price. I sold out of Starbucks stock last year and you haven't given me good enough reason to buy back in.

  • Report this Comment On June 27, 2009, at 7:06 PM, bapcha wrote:

    Starbucks has a GREEN and black logo - with a LOT of GREEN printing on their coffee cups. ALso, they want three green dollars for their latte' each. So, they are GREEN enough.

    Bapcha

  • Report this Comment On June 29, 2009, at 7:29 PM, Hammerman34 wrote:

    "as well as cabinets made from fallen trees in Seattle." I have yet to see a cabinet made from a tree while it was still standing. All cabinets are made from fallen trees. :)

  • Report this Comment On July 16, 2009, at 12:25 PM, TMFLomax wrote:

    Thanks guys - and Hammerman 34, that's funny. I guess the distinction here is whether they had a little help falling or not. ;)

  • Report this Comment On July 20, 2009, at 2:56 PM, olalessard wrote:

    I work with Trikeenan Tileworks, a US tile manufacturer that makes very beautiful tile. We've seen a huge increase in the request for Green building products - and not just from corporations (our tile is actually used in both the new Platinum LEED Starbucks in New York and in several Whole Foods).

    Consumers are driving the demand, so companies that are willing to jump in and use products that are both attractive AND have minimal impact on the environment are responding to consumer demand (and looking like good guys in the process).

    I say, Go Green Building!

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