Starbucks (SBUX) downgraded by Bear Stearns: Is customer base downgrading, too?

And then there's the customer base. As Bear Stearns says, "we think that Starbucks new cyclical sensitivity has more to do with its expanded customer base including less affluent consumers who react to economic pressures." Less affluent, or in other words Those People Whose Are Not Coffee Connoisseurs. The company's lower-income, non-connoisseur customer base is far more susceptible to the economy's ebbs and flows, because their standards are less. Can't afford a Starbucks Christmas Blend? No worries, Folgers makes a very festive can around the holidays.

And the thing is: Not only does Starbucks have to maintain its customers' interest, but also grow its business, convince new and even less affluent customers to buy its products.

Paradoxically, the company is doing this while its coffee quality is falling and its more affluent and discerning customers are flocking to better coffee joints. The company continues to grow its revenue thanks to its no-holds-barred expansion, but it is losing its charm. The hip forward thinkers don't hang out there, anymore. Nope. The cops do.

In danger of slipping from cachet to punchline, Starbucks' stock is reeling. The company has made steps to improve the quality of its baked goods lately, but it will take a return to the old days in which Starbucks could at least be relied upon for a really great latte to hold onto the upper end of its customer base, thereby protecting the growth curve. And thus far, this coffee snob hasn't seen it.