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Makeover needed: Starbucks

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This post is part of a feature on companies and products that our bloggers think are in need of a makeover. See all 26.

OK: Starbucks Corp (NASDAQ: SBUX) is already in the middle of a serious makeover, with instant oatmeal as its unlikely star. CEO Howard Schultz is back with a vengeance, slashing cannibalistic stores, reducing middle management, training employees on how to make lattes (such an idea!), coming up with new mellower coffee blends to combat the constant complaint of burnt-tasting coffee, and unveiling a breakfast menu meant to save Schultz from his own unhealthy habits.

What more could I ask for? Plenty. To begin with, Starbucks has a serious green image problem that was recently exacerbated by the revelation that store policy mandates a faucet in the "dipping well" be kept running constantly. To combat this, Starbucks could institute recycling programs in each of its stores; more aggressively market the "bring your own cup" programs; become more of a leader in demanding sustainably-harvested ingredients in its products (not just coffee beans but hormone-free milk from grass-fed cows -- I know, pie in the sky -- and organic oats for its famous oatmeal); further lead the charge toward healthy food by reducing the sugar contents of its standard beverages and treats.

The other problem with Starbucks is its prices. The company has set the worldwide bar for coffee beverage pricing, without simultaneously setting the worldwide bar for coffee quality. Its coffee is OK, but not nearly so good as much smaller, independent coffee roasters whose beverages are the same price. Price and quality should be commensurate and it's no secret that your consumers are going to start running out of money when the credit crunch hits Visa and Mastercard. Woo them with a 50-cent across-the-board price cut, make the $1.00 coffee a regular menu item, and you'll keep their loyalty.

There are more problems. Starbucks: your baristas are not known for their personalities. In fact, I get more comments on my posts complaining about rude, dispassionate, or just plain lazy employees at your coffee shops than any other food service establishment. This seems perplexing; servers at many other quick service restaurants are paid just as little, and arguably have far less comfy working conditions. Do a better job hiring and training your employees; take a hard look at store management to see if you've let bad apples spoil the bunch.

And finally (and most importantly), this: bring back the coffee shop. Remember when Starbucks was a "third place" where people could go to hang out in a comfy chair and chat with friends? People still meet at Starbucks for all kinds of reasons, but it's just not comfy. The arm chairs have been replaced by smooth, unfriendly art pieces meant to keep customers cycling through. The regular chairs are flimsy and discourage lingering. The layout of your stores is efficient and unwelcoming. What made you great was your atmosphere. Stop treating your retail outlets like retail outlets, packed to the gills with merchandise of every sort, and start treating them like living rooms again. That's what would get me coming back.

Does Starbucks need a makeover? What would you suggest? Be sure to check out the other makeover posts.

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Last updated: November 09, 2009: 06:18 PM

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