Starbucks ain't what it used to be

[gsdx]

They were like the Wal*Mart of the coffee shops, and now they're hurting. Did they kill themselves?

The war on America's Starbucks

With the latte giant reeling from overexpansion and a softening U.S. economy, doughnut maker Dunkin' Donuts took aim at its upscale rival. Now McDonald's has joined the coffee fray as well. Can Starbucks pull through?

By Joseph V. Tirella

In late 2007, Dunkin' Donuts made a surprising announcement: In a taste test in 10 major U.S. cities, the chain had put its most popular brew up against Starbucks' -- and clobbered the coffee conglomerate, 58% to 42%.

The test was held even in two cities where Dunkin' Donuts had a distinct disadvantage: Los Angeles, where the company doesn't have a single store, and Starbucks' hometown of Seattle. "We wanted to show that nationwide, people prefer Dunkin' Donuts to the perceived leader," says Frances Allen, the company's brand-marketing officer.

Armed with the test results, Dunkin' Donuts immediately launched a U.S. multimedia advertising campaign that essentially declared war on Starbucks (SBUX.O). Its timing was perfect: The latte giant was overextended, battered and vulnerable. Its stock had slid from the mid-$30s to the mid-$20s over the previous year (it was below $10 this week); its on-every-corner strategy had left it overextended, with too many unprofitable locations; and the global economy was about to fall off a cliff.

Not only that, McDonald's is fighting back as well with their own coffee bars.

Full report: http://finance.sympatico.msn.ca/investing/stocks/article.aspx?cp-documentid=17283270

Yet another victim of their own greed?

 

[RationalLunacy]

Its stock had slid from the mid-$30s to the mid-$20s over the previous year (it was below $10 this week)

Starbuck's is in serious trouble, as evidenced by the fact that one share of their stock is equivalent in value to the cost of one cup of their overpriced coffee.

 

[Yuki Sohma]

I drink one Starbucks venti (& everyone thought Lation was dead.....thanks SB!)
drip of the day and I'm wired for sound......for hours......


:​

 

[alley]

Yay...my Mcd stocks are doing fabulous.

 

[PreTTy PeTe]

cause i am forced to go to tim hortons

no starbucks here
not one
at all

 

[Paws]

Aren't they getting ready to lay-off around 7,000 workers? I thought I heard that on the news.

Yes, that was news here too.

 

[gsdx]

Aren't they getting ready to lay-off around 7,000 workers? I thought I heard that on the news.

Yes, that was news here too.

It was in the report as well:

The company reported a 97% drop in profit for the fourth quarter of 2008 -- partly due to a $105 million restructuring plan -- and is struggling to regroup. It has announced the shuttering of about 800 U.S. stores, restored visionary leader Howard Schultz to the CEO's seat and made wholesale changes to its menu. The company's latest round of layoffs, announced Wednesday, will eliminate 6,700 jobs.

 

[martin6]

Isn't closing 800 Starbuckses like killing 800 mosquitos in the Everglades??

 

[Triple G]

I mix a blend of whole bean Safeway coffees and it is much better than what the Starbucks serves in the same store, and about half the cost.

 

[star-warrior]

I've never tried a Starbucks in my life.

It wouldn't matter to me anyway if they disappeared.

 

[LilBit]

I go to local coffee shops that get fair trade organic beans from local roasters. Better coffee, and I support the local economy.

 

[M4P]

I still like Starbucks. There are three of them within 1-2 blocks from my office. I have 2/day

 

[LiquidSky]

I like the bold blends Starbux has.....but $2.13 for a large cup of coffee is too expensive. I'm now supporting the locally owned coffee houses instead.

 

[Sausy]

It can still be good,but only if Starbucks would spend less time aggressively expanding and fooling around with their menu and spend more time on assuring that they do coffee like they used to.Quality always beats quantity,and hopefully these hard economic lessons will lead Starbucks to pay attention again to the quality of their coffee and regaining the customer loyalty they had squandered away.

BTW Ravenstar,there's a Gloria Jean's in our downtown mall and it is great.I never knew the company had an Australian background.

 

[chatolandia]

I go to local coffee shops that get fair trade organic beans from local roasters. Better coffee, and I support the local economy.

That's what I do

I found this place that their brewed coffee is excellent, better than any Starbucks


I rarely go to Sarbucks anymore, I go for convenience, if there's nothing close

 

[Huskerboy]

Believe it or not, but I've never been to a Starbucks... I'm not that much of a coffee hound in the first place, so when I heard about some of their prices, it was just something I never got around to doing.

I have tried one of McDonald's iced coffee drinks and it wasn't too bad.

 

[metta]

I don't drink coffee, but I have several neighbors that go to starbucks several times a day. They are totally addicted.

We have typical sized shopping centers that have at least 2 starbucks in one center. The ones in my area still seem busy. However, i do think that it is wrong that so many college students use them to study, taking up most of the seats for patrons that want to buy things.

 

[tommyj]

I still like Starbucks. There are three of them within 1-2 blocks from my office. I have 2/day

LOL! A PRIME example of overexpansion!!

 

[tommyj]

BTW Ravenstar,there's a Gloria Jean's in our downtown mall and it is great.I never knew the company had an Australian background.

Hey last year they closed a Gloria Jeans in Terminal B at Philly Airport and replaced it with a Dunkin Donuts! Also, speaking of Philly, has anyone been to a Saxby's coffee which is based in Phillly?

 

[gsdx]

And by the way, why the hell can't Dunkin' Donuts serve their coffee and let us serve ours? McDonalds too - why don't they both shut the fuck up? I'll tell you why --> because we're superior, and they know it - and they can't take it.

Live and let live.

Starbucks ain't botherin' no one.

Yet I don't recall reading any news reports of McDonald's or Dunkin' Donuts closing hundreds and hundreds of shops around the world and laying off thousands and thousands of people.