Starbucks Leaves a Bitter Taste

• Report this Comment On December 23, 2008, at 12:52 AM, TMFBreakerDave wrote:

  Starbucks's original strategy was NOT to provide lots of creature comforts to cause people to sit around all day in the (often limited) space. I remember when we quipped -- or did I hear this in company investment presentations? -- that they weren't exactly offering the most comfortable seats *for a reason.*

  I don't know if that's still the strategy. But it's worth considering, as it is. I think a higher degree of turnover and re-using of space by more people might well be the most desirable outcome for Starbucks. So on the face of it, I'm not sure how important WiFi really is. --David

• Report this Comment On December 23, 2008, at 1:14 AM, TMFMileHigh wrote:

  Maybe. But if that's the case, then how do you quantify Starbucks' competitive advantage? Is it the coffee? That's certainly true for my wife. But she also loves Peet's, as do I. Great company, looking for a reason to buy, but I don't understand how management defends profits from here.

  Thanks for chiming in, David. Welcome back from your Fool's errand.

  Tim

• Report this Comment On December 23, 2008, at 7:26 AM, TMFMarlowe wrote:

  I don't know if this qualifies as data, but here's an observation to ponder: At least around here (Massachusetts), we've observed that most SBUX stores have lots of electrical outlets, while the Paneras have only two or three electrical outlets per store. Most folks with laptops will move on after a couple of hours if they can't plug in... seems like a subtle way to encourage turnover -- and likewise it seems that those Starbucks stores are inviting laptop users to linger. I figured it was a deliberate strategy on both sides, but David's comments about not offering the most comfortable furniture (I recall hearing similar from MCD once upon a time) make me wonder if there's been a change in thinking -- and if so, if it'll change back.

  Assuming that my observation isn't just a fluke of local architecture or something, that is.

  - John

• Report this Comment On December 23, 2008, at 7:38 AM, TMFBreakerTAllan wrote:

  I think the strength in Starbucks is the consistency of the coffee and location. Routine is the key to the chain's success beyond the coffeeshop experience. And that routine can change depending on circumstance and the Starbuck customer is the one that is hurting in this latest recession. I am not so sure whether or not free wi-fi is the be all and end all to the story rather than the economy.

  Starbuck's growth started dropping with the recession, now called at the end of 07. Maybe Starbuck's is the new leading indicator?

  T. Allan

• Report this Comment On December 23, 2008, at 8:31 AM, dgp100 wrote:

  Starbucks is the poster child for a period of massive excess we should be ashamed of. It is no longer "cool" to be part of the Starbucks crowd, quite the opposite.

  Paying $5 for a coffee will be as unacceptable to most over the next 5 years as living within your means and buying a house you can afford was the past 5 years, even for those who can afford it.

• Report this Comment On December 23, 2008, at 9:08 AM, TMFMarlowe wrote:

  <em>It is no longer "cool" to be part of the Starbucks crowd, quite the opposite.</em>

  I dunno, the SBUX stores around here have been jammed lately. Maybe there are a lot of uncool folks in greater Boston?

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