Is Starbucks committing suicide?

Maybe Starbucks should start selling burgers! I am one of trhe lucky ones who is not addicted to $4.00 a cup coffee!

Basic branding and marketing know-how would tell you that lowering prices would completely eliminate all that Starbacks has worked to create. The expensive coffee IS the Starbucks brand. If they lower prices, they throw that away and then Starbucks means nothing in the customers eyes. It becomes just another place to get coffee.

He isn't an idiot. He's thinking long term. Panicking and slashing prices in the short term is NOT the right move. That's true if for no other reason than once prices come down, they can never go back up. Customers won't stand for it.

Gotta agree with Warren. While it is indeed unfortunate for Starbucks (and their shareholders) at times like this that the (high) price of their primary product is tied to their brand, but to lower prices would be more of a suicidal move to the Starbucks brand than would be temporarily losing some business because of a down economy. If I were a SBUX shareholder, I would be angrier if they lowered their prices and compromised the entire brand.

Starbucks' market is NOT that of McDonald's and Dunkin Donuts. Their new mission statement is "To inspire and nurture the human spirit— one person, one cup, and one neighborhood at a time." Doesn't sound like an organization fearing fast food franchises.

That does not mean selling mass produced coffee, but to establish a relationship with their customers. Starbucks, before and after its overexpansion, had this ambiance that has not been successfully duplicated by any national chain or Franchise that remains in business today.

Starbucks can be rescued if the company agrees to return to the core principles established years ago by Howard Schultz, and not by cheapening its brand...

When times are good, fine, spend 6 dollars on a cup of coffee, but when times are bad, only a fool spends that much and pretends that everything is okey-dokey. Starbucks can continue to create a feel of La-La land for their customers if they desire at their peril.

When things were good, I got an expensive cup of coffee once a week. Now it's once a month, at best.

If people continue to look at alternatives (e.g., McDonalds, Dunkin Donuts, mom-and-pop shops, or their kitchen), Starbucks will have to lower prices or find other ways to cut costs and be competitive.

Starbucks primary product is customer service, not coffee. Perhaps bad for Wall Street, but good for its customers.

Howard is committing suicide. Forget McDonalds and Dunkin. Howard had a great idea and way too many people think is some kind of genius. He is not. People are finding a great many wonderful, comfortable, new coffee houses that make great coffee for much less cost. By the time this long recession ends, the coffee market will be diluted and the brand will become thought of as overpriced and foolish for never lowering prices during a harsh economic period. Howard is being stubborn and foolish.

I agree with Wily, Howard had a great idea and did an admirable job teaching the population about having a coffee and getting a great experience. It's a great success story in American business. But with expansion and size come issues, particuliarly when you don't have "on premise" owners in there everyday making sure the experience is consistent.That's one of the problems with any multiple unit organization. The best managers in a company organization get promoted and then the process of change occurs in the location...this disrupts the natural daily flow of activity. Plus, you don't have the "vested" interest an operator has. That's why McDonalds has been so successful. Another added benefit is having operators constantly trying to do things better in their locations, which results in powerful practical and actionable ideas. Which is why many of the early menu additions and innovations came from the licensees themselves...they (McDonald's) developed a true partnership. If this peaks your interest, you might want to read my book which came out last month, "Everything I learned about Business I learned From McDonald's.

I'm confused. I travel for a living....and in most places I see -- coffee at McDonalds costs the same. A cup of coffee at SBUX starts around a buck...the same as McDonalds...but the McDonalds coffee is bland and week. And...have you tried the McD Latte? OK if you like all the artificial and sweet flavor...and it's usually only 10 cents cheaper. i'd rather give my extra 10 cents for the natural ingrediants, service, and knowing everyone serving me has health insurance. Why the heck would anyone lower prices when the are already at competitor levels, but they're giving so much back to customers and employees. Am I off base here?