Yesterday morning, Amy and I were having breakfast at Santa Monica's 18th Street Coffee House (which actually looks like my concept of a coffee house -- lots of dark wood finishes). I read Amy an article from the LA Times about how last quarter visits to Starbucks stores fell for the first time since -- well, ever. The way every head swiveled around to look at us, you would have thought I had mentioned E.F. Hutton. (That's a reference that will be lost on anyone under 30.)
The fall in Starbucks attendance strangely coincided with an increase in the price of drinks chain-wide (four months ago), a dip in the chain's stock, and rising gas prices (not to mention the sub-prime mortgage debacle) that have led some to believe that perhaps a $4 a day latte habit is not, financially, a good idea.
Throw in the number of local coffee bars that have taken a page from Starbuck's playbook and charge nearly identical prices for the same types of lattes, cappucinos, and froufrou drinks, and you'll find the Starbucks mermaid facing some rough seas ahead.
Perhaps a good starting point for Starbucks to regain its momentum is to reconsider its previous strategy of saturating the market with stores like a spilled machiato saturates a bar-towel. At some point, too many Starbucks is too many Starbucks. If you can hardly take a step without tripping over a Starbucks, it stands to reason that the sales in each store is going to go down.
1 comment:
When E.F. Hutton talks people listen.
Another reminder that I am well over thirty.
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