Facing tough economic headwinds, Starbucks
The Wall Street Journal reported on a grassroots campaigns springing up to save numerous stores slated for closure, many of which are located in small towns. Both customers and local officials are driving the phenomenon, which the WSJ dubbed the Save Our Starbucks campaign.
Starbucks shareholders like me know that the company is smart to shutter underperforming locations and focus on highly profitable growth. But distraught customers' perception that their local Starbucks' closure is a blow to themselves and their communities suggests that the java giant's brand remains as strong as ever, unlike the tarnished brands most retail turnarounds suffer. Rising food and gas prices may reduce the amount of coffee most people currently buy, but I doubt that's because those people think any less of Starbucks.
My Foolish colleague Rick Munarriz recently recapped a survey indicating that Starbucks' customer traffic has fallen off. All the same, outcry over Starbucks closures gives me one more reason to believe that the company's a far more compelling value stock right now than retail turnaround stocks past and present, such as Circuit City
Starbucks has attracted a loyal following for its quality coffee and sterling customer service, successful elements that the company's built into its brand. I know I always enjoy seeing the baristas at my local Starbucks. Store closures aren't good news, but I think shareholders would have better reason for concern if their local Starbucks shut down -- and no one cared.
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