Starbucks CFO complains the street overemphasizing service slowdown

Posted Aug 4th 2006 7:15PM by Michael Canfield
Filed under: Major Movement, Earnings Reports, Bad News, Starbucks (SBUX)

Starbucks (SBUX) CFO Michael Casey in Wednesday's conference call: While this [service slowdown] is an issue, and we're working on it, and we're going to get it solved, it perhaps doesn't quite deserve the focus it's been getting" from Wall Street. [via Forbes.com]. Fair enough, but controlling what the Street chooses to focus on is not easy. I'm surprised at that the play that that issue has received, I can only assume that there must be some value to holding it as a concern, because I haven't noticed lines increasing myself. Or am I already so indoctrinated I don't notice time spend in line any more (as we say out here in the sticks-- or on line as they say in NYC). It seems upper management is aware of the situation -- I almost wrote, hyper-aware, but seeing that it is such an issue for many analysts, I suppose they can't be overly concerned about it.

Come to think of it, I've walked out of joints with slow service plenty.

I'm pretty impatient generally, thereby causing various businesses to lose revenue they are not right then equipped to handle. I doubt I'm alone in this, and it's a problem many retailers face, as victims of their own success. It's frustrating for the customer and frustrating for the business, but a problem that's usually temporary one way or the other. As Yogi Berra said (or didn't): "[That place] is so crowded nobody goes there any more."

Call me "Pollyanna," but I suspect Starbucks can handle refitting and adapting to an unanticipated growth in popularity of more-complicated-to-make icy and fruity blended drinks in the morning hours. They will do just fine.

Michael Canfield is a private investor, a business and media writer, living in Seattle. He doesn't own stock in Starbucks.

Tags: coffee, earnings reports, EarningsReports, frappucino, long lines, LongLines, Michael Casey, MichaelCasey, SBUX, Starbucks, tazo, yogi berra, yogi-ism, YogiBerra

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Reader Comments (Page 1 of 1)

8-04-2006 @ 9:50PM

Mr. noitall said...

The guy shouldn't complain so much. He allready fooled alot of people into paying way too much for a cup of coffee. Now he wants to fool investors into paying too much for the stock, by saying that the "problem" is business was so good we couldn't keep up with the huge demand for our new (overpriced) drinks???. I think most businesses would love to have a "problem" like that!! We all know the old saying..."fool me once, shame on you, fool me twice, shame on me"

8-04-2006 @ 10:32PM

Linda Biscardi said...

Starbucks will more than likely find a way to make their blended drinks in a shorter amount of time. Necessity is the mother of invention. They have already found ways to steam milk in 5 seconds which is a good 10 times faster than you could have steamed a pitcher in the past. This is a company that has pioneered the coffee drink business in America and their stock is going nowhere but up.

8-05-2006 @ 2:00AM

Pat Kaufman said...

I love Starbucks, but many mornings the line is so long that I take one look at it and walk out. The manager at my favorite store says the problem is that they won't let her hire more personnel. Hmmm??? More interested in profit margin than customer service, wonder what their model is?