Walmart's New Health Food Push: Is It Too Hard to Swallow?
Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerStarbucks' (NASDAQ: SBUX) Howard Schultz came back to the CEO role in late 2007 to hopefully rescue the once great concept he has so passionately developed since the 1980s. Fair enough. Could this be the second coming of Steve Jobs of Apple (NASDAQ: AAPL) or would it resemble the mediocre return of Michael Dell of Dell (NASDAQ: DELL)? The jury is out and time will tell.
For now, I have one major bone to pick. Howard, let's take some time here to review the store closures. I am sure a mid-level vice president made the geographical decisions. But I hope you really scoured the list carefully.
Let's take an example: Minnetonka, Minnesota. Howard, I'm sure it may not mean much to you. After all, you were raised in New York and currently live in Seattle, so Minnesota may be flyover country. Minnetonka is a western suburb of Minneapolis sporting a growing population of about 52,000. Minnetonka is a fairly upscale suburb with near full employment. Just for your information, Minnetonka is also the world headquarters for the biggest private company in the world; probably one of your suppliers. The company is called Cargill -- just in case your VP missed it.
It's on the Starbucks hit list. You are closing the Minnetonka store. Are you nuts?!! I have written in the past that this store should serve as one of your models on how to do it right. Sure, economics eventually have to make sense. This store is about three years old and the growth of traffic has been steady. Used to be one person in line at 10:30 am, now it's common to see a continuous stream of 7-8 people in that off -hour line. Early mornings are very busy.
Manager Mario Macaruso should serve as a training manager. He is too much of a gentleman to complain about being on your hit list. Mario is a huge believer in Starbucks' future, but the pain in his eyes is evident. Many of his partners at this store have been there for one or two years, offering the customer a consistency of service, not to mention smiles and morning cheer. You know, the things you espouse about Starbucks!
I have visited over 200 Starbucks stores in the past five to six years. This one by far ranks as the best customer experience. Funny things happen when time intersects with great service -- it's called profits.
Howard, give this store the time to become profitable if it isn't already. The Minnetonka demographics fit the bill and store partners are fabulous. Hop on the company jet and fly to Minneapolis -- it's about a three-hour flight -- and visit the store. Talk with the partners, watch them work the crowd, take notes.
In fact, make spot checks in other stores on the list. Are they really the best candidate? Howard, assuming you aren't intimately involved in these decisions, it's time for you to get personally involved.
Sure, I want to save my favorite Starbucks. But I also think CEOs owe it to their shareholders to pay close attention to details in challenging times. To turn Starbucks' around, you need to make sure the Starbucks you decide to close aren't actually the ones with the most potential.
Georges Yared is the editor of YaredsGameChangers.com and author of "How to Spot the Next Google."
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
Reader Comments (Page 1 of 1)
7-14-2008 @ 3:28PM
safaeser said...
there are 5 starbucks in a square mile where i live. the customers in the starbucks in minnetonka probably come from MILES around just to get some. shut down one of the five. there's one on every corner in L.A. but DO NOT shut down the drive-thru ones. i'm disabled and it would be hard to get in the stores. i drink more because of the drive-thrus.
thanks
7-14-2008 @ 4:23PM
picbyron said...
I am with you Please do not get rid of my Starbucks. I look forward to Consistently Good coffee on the drive to work.
7-14-2008 @ 6:11PM
faith said...
I work for Starbuck's, and I find the article to be lacking in several facts. It would appear to a reader that the Starbucks executives drew store names out of a hat when deciding which locations would be closed. The store closing closest to my location is the only store in that town, but it operates at a huge loss every single year. Sometimes oyu have the best customer service, but a business has to make a profit, or it will die. Hopefully the great partners in Minnetonka will be able to get transfers to other locations. In sum, don't be so flippant about the facts, especially when the decision to close stores affects the lives of the individuals who work there.
7-15-2008 @ 10:55AM
Jeff said...
oh you got served.
why is it that nobody consumed this black gold till Starbucks anyway? everyone speaks of it like it's a drug. oh wait.
7-19-2008 @ 10:12PM
coffee Joe said...
This author does not state that there is another Starbucks kitty-corner from this location as well
7-19-2008 @ 5:47PM
mkovalesky said...
obviouly the person who stated that there is another store caddy corner to the Minnetonka store has never been there . The only coffee shop with mile is the Muslim institution Caribou
7-19-2008 @ 9:43PM
Neon Tango said...
G. Yared, In a bizarre fashion, I was relieved when I came across your post. So, I'm not the only one who thinks there's something hinky about Starbucks "formula" for determining which stores get the axe?
Check this: "Strange Brew: The Starbucks Closings - The Kill List" at
http://blog.myspace.com/blackjack4fun
7-21-2008 @ 8:21PM
Bob D. said...
George, are you tired to make wrong recommendations after wrong recommendations ? I lost 100k already following your advices. Thanks so much
8-06-2008 @ 11:21PM
Mari said...
I also work at Starbucks and the article is lacking many facts. My store is also closing. And well it hurts us all as we grew so close to our partners and our customers, it had to be done. I'm not condemning Howard for the way he is closing the stores, but if a store is an under preforming store, it should be on the list. Good customer service is up to the customer, howeverm if the author of the article was a frequent at that store, which it sounds like they are, they are most likely bias toward it. Also, if you are a frequent visitor, the partners will recognize you and will be able to spark up a conversation better. Please, before attacking Howard Schultz and the Starbucks Comapny, make sure you have all the facts and have done your research. And please realize that the store you frequent at is not the only store that is hurt by this.