The new m.o. at Starbucks Corp. (NASDAQ: SBUX) seems to be: give 'em their dour forecasts, then celebrate if the future is not, after all, entirely decaffeinated. After all, the company's stock is already at a low not seen since November 2001; all of the respectable gains of the past seven years have been wiped away. Starbucks stores may be cheerily decked out in holiday colors and decorations, but its management is nothing but sad, downcast, despondent, glum.In the company's annual report filed yesterday after market close, management provided a Santa-sized list of all the reasons its sales have been down and its expenses up, as well as providing a dim outlook for a future ravaged by poor discretionary spending, stiff competition from low-priced coffee at its fast-food rivals, nasty landlords who won't go gently into the goodnight of store closings, and to top it all off, financially anxious consumers. To blame for 2008: foreclosures, high food prices, and less generous credit card limits.
At the end of this annual report, you have to wonder if coffee is the right business to be in. After all, the beverage isn't known for being a tonic for the depressed (when have you ever heard of a wronged hero drowning his sorrows in coffee?). Maybe Starbucks should look to add a line of moonshine to its offerings; offer it in Venti and "Jug" sizes and send free gift cards to the investors, who are the only people in America who deserve to be as solemn as Starbucks' annual report.
Closing Bell: The Bears Get a Win (APPA, NLST, AET, PALM, IDT)
Can Crocs Continue Its Quest for New Highs?
Twitter May Chirp Its Commercial Accounts Next Month
Reader Comments (Page 1 of 1)
11-25-2008 @ 2:33PM
larry said...
Who cares about any of these so called need to be seen expensive coffee places. In most cases ,it is showing up with your disposible named cup advertising "I GET MY COFFEE AT STARBUCKS OR WHEREVER' after they ripped you off. Half the time people do not even finish the stuff ,pour it out and flaunt their "I can afford this attitude!"
A cup of "joe" and most of us are happy! Maybe ,a little something added from the fridge or whatever.Who needs to get in a line,wait at a counter,expected to give a tip,which is probably more than a cup at the White Castle or McDonalds? Fact is ,we are trying to be what we are not..Phonies
I hope you spill your coffee after leaving on a speed bump ,in your fancy car,in front of people you are trying to impress and burn your balls or whatever!
11-25-2008 @ 2:47PM
kevin said...
I don't usually endorse mcdonalds, but I was very impressed with their new espressso drinks. I do believe starbucks has more competition
11-25-2008 @ 4:40PM
Herb said...
Larry,
Wow. You have validated my seemingly misguided stepfather; he feels Starbucks is status related too. The idea that you look cool or affluent pulling out of a Starbucks or drinking from one of their paper cups, I think, is absurd.
Whether or not you are wasting your money is another matter.
The bigger question, Larry, is why are you so indignant?
11-25-2008 @ 4:56PM
Journalist said...
Whoever wrote this article was trying a little too hard...
11-25-2008 @ 6:16PM
Kim said...
Larry,
Why so angry? If all coffee places could make a shockingly strong cup of kick-start coffee like Starbucks x-tra bold, I'd stop anywhere. I drive the oldest Subaru beater on the planet, I don't buy $5 specialty coffee - it costs 2 bucks just like everywhere else, I enjoy a hella strong cup of coffee, I get it in a re-usable to-go mug that I purchased at Walmart for $4.99. I highly doubt that "cool" is the word surfacing in most people's minds as they watch me pull out of the drive thru in my fuel efficient, albeit slightly rusted wagon with an even older multi colored kayak attached to the roof. No everyone that buys Starbucks is a pretentious rich, ego maniac looking for attention. Sometimes it's just about the coffee bud. Cheers, and relax. Maybe you need some stronger coffee too. I recommend the Komodo dragon.
11-25-2008 @ 7:31PM
realitypolice said...
Starbucks makes coffee right period. They sell good high quality coffee, and much of the US is not accustomed to that. However, they got greedy with the pop culture phenomenon, which caused them to open stores on top of one another. Their food and packaged selections are especially insulting to anyone with a clue. Thawed and/or shrink wrapped crap, all of it, and the prices are ridiculous. Add the declining atmosphere that has invaded the company over the past 4 or 5 years as the company became a bandwagon for those (management and executives) looking to ride their growth wave. All this, plus a deteriorating economy led them exactly to where they are and they should have seen this coming or been more proactive to be in a good position to weather out any storm. To me this is clearly a sign of a company that makes bad decisions and got very lucky for years with a poorly constructed business plan. Now they are trying to encourage stockholders through optimistic soundbites when I believe they know they are never going to be what they once where from a financial standpoint. Learn to brew your coffee correctly at home it is 5 times cheaper and the atmosphere is better these days than the dismal "third place." For those 100% copy cats like Caribou, bye-bye.