Starbucks (NASDAQ:SBUX) can't seem to do well in the US. People who feel poor don't want $5 coffee and the chain seems to have built too many stores here. The company has even gone so far as to close some.
But, bright on the horizon, the Seattle-based company sees Europe as a potential region for expansion. So, the company will open 150 new stories on the continent. According to Reuters, "The coffee shops are to be opened at airports and railway stations and come as the chain looks to offset a slumping U.S. market with overseas growth." The new stores will be franchised and run by a UK company called SSP. At least that probably means Starbucks will not be taking all of the financial risk.
Starbucks may find that a recession in Europe is likely to keep people out of expensive coffee shops just as much as its has in the US. But, the new push into the continent has a more telling aspect. Starbucks does not have the taste for risk that it once did. There was a time when the company would have taken all of the risk and all of the reward to push more aggressively into a large market.
Starbucks is not only suffering from slowing sales. It is getting timid.
Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.
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