One of the key features of any Starbucks Corp. (NASDAQ: SBUX) location is the pungent aroma that emanates from its stores. That smell, the trademark scent of coffee beans being roasted, is a main reason customers flock to Starbucks locations instead of the competition. Okay, make that the only reason; well, in my opinion.In the last year, Starbucks began serving breakfast sandwiches and other non-coffee fare in its U.S. stores under former (and short-lived) CEO Jim Donald. Founder Howard Schultz has made it a point that opening a plethora of new stores and offering a bunch of new items was a reason for falling sales and disappointing performance for the company last year.
As such, Donald was pushed out and Schultz returned to the CEO spot just recently. His main reason: Starbucks was not the company he founded. The "experience" had been lost and the coffee retailer was in contention to become yet another ordinary coffee shop. Donald was following short-term Wall Street greed; Schultz could care less about that and said he will return focus to the consumer experience (which will bring its own returns).
Schultz, over and over, makes the point that Starbucks needs ambiance, including that trademark roasting smell, if it is to become successful again. He's right -- the smell and the quiet, homely atmosphere are its largest marketing pitches, more than store openings and new product offerings. Schultz plainly said it, "In short, the scent of the warm sandwiches interferes with the coffee aroma in our stores." He then then announced that breakfast sandwiches are going away permanently and that the chain will also close 100 under-performing U.S. locations in order to slow down what he calls the "dilution" of the Starbuck's brand. Again, he is correct. The chain should be exclusive to each area it serves, not plowing down the landscape with so many locations that the brand itself loses its luster.
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Reader Comments (Page 1 of 2)
1-31-2008 @ 11:02AM
Bill Dollar said...
Sadly, Howard Schultz took his eye off the ball and allowed the company to drift into their current mess. Turning around a brand to recapture their past glories will not be an easy task! McDonald's sees blood in the water and will continue to attack Starbucks!
Only Howard with his passion can perhaps save the ship!
1-31-2008 @ 2:12PM
ziggyarnold said...
Friendly, enthusiastic and intelligent service was another hallmark of Starbucks and part of the experience. Unfortunately, this has been lost, especially in airport and grocery store locations. It makes me look for a Caribou...
1-31-2008 @ 11:10AM
beanspants said...
homely atmosphere? i find the stores to be somewhat minimalist, but far from homely. ditto for the atmosphere.
1-31-2008 @ 11:15AM
soundviewrob said...
Poor Howard, so much to do! I wish you every failure possible going forward in the future. There is a basketball god in heaven and he doesn't drink Starbucks Howard. Haaaah Haaaaaaah
1-31-2008 @ 5:13PM
MSUSpartans04 said...
He says they're only closing 100 stores, I think that number needs to increase. They have stores in markets that quite honestly are NOT Starbucks markets! That further dilutes the brand, more so than warm breakfast sandwiches.
1-31-2008 @ 12:21PM
P McCurdy said...
Coffee way too strong for my taste. As for homey atmosphere, I agree, as stated above, that the stores are very cold and not filled with any sort of warm, homey feeling.
When out doing business, my husband doesn't stop at Starbucks, because he can't get anything to eat there....so the idea of doing away with breakfast or lunch items, seems less than a good idea.
1-31-2008 @ 1:46PM
Boring Market said...
Starbucks is truly aiming for a comeback, all these hard decisions will benefit the company in the long run. Let's see what Howard has up his sleeve in the coming months.
http://www.boringmarket.com
2-01-2008 @ 10:36PM
Karl said...
I love Starbucks, think their stores are great and will always frequent them. Been to Dunkin Donuts and was not excited about that experience. Frequent Barnes and Noble, read and drink starbucks coffee. Great past time and enjoyable.
I do believe they need to stick to the Barista and not those lousely automated machines. takes away from the character. I enjoyed our Cafe in Italy, where they have actual Cafe Bars.
2-04-2008 @ 12:39PM
kat said...
Also, don't forget that when the Twin Trade Towers were hit, the firefighters and rescue workers went to Starbucks because it was close by, for water for the survivors and workers, and Starbucks charged them! ! !
JUST A NOTE TO THIS: STARBUCKS HAD STORES ON SEVERAL MILITARY BASES IN THE UNITED STATES. THEY ARE NOW BEING REMOVED BECAUSE OF THIS.
2-04-2008 @ 12:42PM
kat said...
Recently, Marines in Iraq wrote to Starbucks because they wanted to let them know how much they liked their coffees and to request that they send some of it to the troops there. Starbucks replied, telling the Marines thank you for their support of their business, but that Starbucks does not support the war, nor anyone in it, and that they would not send the troops their brand of coffee.
So as not to offend Starbucks, maybe we should not support them by buying any of their products! I feel we should get this out in the open. I know this war might not be very popular with some folks, but that doesn't mean we don't support the boys on the ground fighting street-to-street and house-to-house.
If you feel the same as I do, then pass this along, or you can discard it and no one will never know.
Thanks very much for your support. I know you'll all be there again when I deploy once more.
Semper Fidelis
Sgt. Howard C. Wright
1st Force Recon Co
1st Plt PLT
2-12-2008 @ 10:19PM
Staci L. said...
Kat ~ I am a Starbucks store manager and feel the need to set a few things straight. As Starbucks may or may not agree with the reasons behind the war in Iraq, I'm here to tell you that we, as a company, have been collecting coffee for our troops for the past couple of years. Both partners and customers have generously donated many thousands of pounds of whole bean coffee as well as grinders to the troops to show our support, and give them a much-needed taste of home. This coffee is being collected by partners (volunteering their time) and dropped off at local military bases around the country with servicemen who are going over to Iraq. And as for the person/people who were selling bottled water for profit to the survivors of the Trade Center tragedy, they do not represent Starbucks. They were simply greedy, heartless individuals, who saw an opportunity to make a quick buck. Those people will have to live with what they've done, and will face the ultimate judgment when that time comes for them. In short, Starbucks gives a lot back to the communities in which they reside. In my store alone, we donate to the local senior center, several homeless shelters, schools, cancer walks, Relay For Life, and so much more. So before you go judging people who do many things to show they care, please do your research first.
Thanks for listening.
Staci ~ California
2-14-2008 @ 6:52PM
Dawn said...
Staci-
I too was a store manager and absolutely agree that there is a lot of misinformation out there about the generosity of this company. My entire region in S. FL has dedicated many hours in volunteering, donating of time and product to support causes in the communities in which Starbucks does business. This is a passion of this company as well as the partners that work at all of the stores. I have seen thousands of cups of coffee donated, pastry and coffee to homless shelters, beach and park clean-ups and even coffee sent overseas in support of our troops. After the Sept. 11th tragedy, this company gave so much to help out families in need. Each store took donations on behalf of the American Red Cross and bottled water, coffee and food was also given. Even though I no longer work for Starbucks I still am one of the biggest fans of what they stand for. This is a company with a heart and a passion for community. I will always be a partner (in spirit), a shareholder and a fan of what Starbucks stands for.
2-16-2008 @ 9:21AM
galenrd said...
Sgt. Wright,
Because you are a Marine and, I assume a well-intentioned and honorable man, I will temper my response to you. What you have posted is a urban hoax that originated from a twisted mind, as many urban hoaxes do.
Please do not believe emails circulating the net that make such outrageous claims. As a thinking man, it is incumbent upon you to independently verify the validity of the chain emails or whatever some ill-informed person tells you, regardless of how sincere it might seem.
2-06-2008 @ 12:34PM
gus gus said...
this is the first that i'm hearing about starbucks charging for water after 9/11 or not sending coffee to our boys in iraq. If these stories are true, i'm surprized that more negative press wasn't giving to starbucks?
2-12-2008 @ 5:28PM
boredwell said...
Starbucks, on a "caffiend" high, was addicted to overkill. In Seattle they anchor every corner. There are automated shops besides ATM machines. When Starbucks began to expand, they bought up mom and pop shops. Their idea to become part of the neighborhood culture wasn't the worst idea. Gobbling up the corner cafe did not endear them to the community. They replaced the friendly and homely with their trademark starchy, strictly streamlined interiors which did not reflect the neighborhoods they had invaded.
The baristas and counter people at Starbuck are the company's best selling point. I stop at the one a block from work every morning. They know my name, they remember my "usual" and sometimes have begun my drink when they see me getting off the bus. This continiues to impress me. These good people are the true sales initative for patronizing Starbucks.
Mr Schultz should be out and about every major city asking customers how Starbucks relates to their lifestyles.Moderation in all things, Mr Schultz, can be a virtue.
2-13-2008 @ 11:25PM
Barbara said...
I walked into Starbucks the other day.I wasn't that impressed because Panera is better with coffee and food and the people that day at Starbucks were stark quiet.I am someday thinking of going in there in a pink tutu to break the silence.
On the other hand I walk into Friendly Donuts in New Bedford,MA and I know the waitresses' name,she asks me how my dad is,and if shes not busy she'll have a light conversation with me.That shop is like a community something Starbucks doesn't have is down to earth people.Too busy to talk...people who pass by each other every day and never share a conversation.I know thats the reason why my dad has been going there every day for 20 years.And to Friendly's credit their open 24/7.Many friends have been made over there.
2-14-2008 @ 8:19AM
Dan OLeary said...
Starbucks Coffee sucks.Give Me a Caribou coffee
any day!!!
2-14-2008 @ 10:32AM
Anne said...
big mistake to discontinue the breakfast sandwich. that is all that really brings my husband and I in there. too bad..... Hello Pete's!
2-14-2008 @ 1:45PM
Heidi Marsh said...
Starbuck's has raised their prices in the last year or so. As much as I like their coffee, I can't justify visiting as often because it's downright painful to pay over $5 for a latte. As unrealistic as this may sound, it would be great if Mr. Schultz would consider lowering their prices a bit. The greed is really starting to show.
2-14-2008 @ 2:51PM
Sandy said...
I just want to say that I love Starbucks, especially the specialty drinks, and the people are the friendliest around. After reading the comments, it's obvious the employees and quality vary from location to location, so Starbucks should not be badmouthed overall because of a few bad experiences. If you have a bad experience, you should write to their headquarters and let them know which location you were in. Hopefully, they will look into the ones that need more training and/or replacing of employees.