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Is Starbucks Slipping?

Molly McCluskey
March 28, 2013

There's no question that Starbucks (NASDAQ: SBUX) has a more outspoken, community-minded mission than its competitors. When CEO Howard Schultz politely told a shareholder to sell his shares after the shareholder suggested Starbucks' gay-marriage stance was hurting the company, it was just one more headline in a year of headline grabs.

But was the shareholder right? Is Starbucks a victim of its own passions? While beans may make the cup, the message makes the brand. And as Starbucks' message gets a little muddled in the face of growing competition, the competitors are using the mermaid to build their own brand.

Market slip?
A recent poll of hospitality's most social brands shows that McDonald's (NYSE: MCD) has slightly edged out Starbucks in its online love. It's a subtle shift, but one that reflects a larger trend. McDonald's has long been the haven of those on the go, while Starbucks has courted the entrepreneur/freelance-work-from-a-coffee-shop crowd (including yours truly). But Starbucks' new eco-friendly, small-space store with no room for power outlets, tables or lounging has some wondering if Starbucks doesn't want the all-day-sitting, free-refill-drinking coffee-loving laptop-toters, after all. On the other hand, McDonald's recent push to include customers in its social media campaigns came with prizes worthy of the Macbook-toting hipster crowd.

Dunkin' Donuts (NASDAQ: DNKN) has slowly gained market share over the past year, while its "Friends Don't Let Friends Drink Starbucks" campaign is now as recognizable to many as the mermaid herself.  

A coffee klatch
Coffee lovers should keep an eye on the German investment firm Joh. A. Benckiser, which has been methodically buying up coffee companies for the past year. The Minneapolis coffee chain Caribou Coffee was recently purchased for $340 million. The group also bought Peet's Coffee & Tea last year for $974 million. Rumors abound that the company is now eyeing Dutch Master Blenders, the company spun off by Sara Lee last year. Dutch Master Blenders