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News & ArtsWednesday, January 20, 2010
Economy The Mighty Return of Starbucks
Posted by Charles Mudede on Wed, Jan 20, 2010 at 5:13 PM
BBC:
Starbucks is continuing to prove that it has successfully turned its fortunes around as it sees its latest quarterly profits more than triple.I'm really surprised about this. I had convinced myself that there was nothing left for Starbucks but a long and slow decline—a decline that would see the receding 90s as the company's moment in the sunThe US coffee chain giant made a net profit of $241.5m (£148m) in the three months to the end of December, compared with $64.3m a year earlier.
Buoyed by extensive cost-cutting work over the past year, the firm has also won back customers in its home market.
1
I'm not...they made a simple beginning company's mistake: they grew too fast too soon.
They've realized their mistake and they've regrouped...they seem to be a smart company.
Nope, don't work for Starbucks...never have...Starbucks and Boeing are the only two superstar local companies I HAVEN'T worked at...them and Dicks.
They've realized their mistake and they've regrouped...they seem to be a smart company.
Nope, don't work for Starbucks...never have...Starbucks and Boeing are the only two superstar local companies I HAVEN'T worked at...them and Dicks.
3
Wow. NYT online top front page right now is this story - with a photo of and lead paragraph about "15th Avenue Coffee and Tea":
Young people wearing hoodies and chunky glasses are sipping microbrew beers and espressos, nibbling on cheese and baguettes made at a local bakery and listening to a guitarist strum and sing.
http://www.nytimes.com/2010/01/21/busine…
Young people wearing hoodies and chunky glasses are sipping microbrew beers and espressos, nibbling on cheese and baguettes made at a local bakery and listening to a guitarist strum and sing.
http://www.nytimes.com/2010/01/21/busine…
5
Pretty impressive, going from a 2% profit margin to 9% in a year - especially such a bad year.
Still, I'd expect selling drinks at 15 times their actual cost would yield quite a bit more.
Still, I'd expect selling drinks at 15 times their actual cost would yield quite a bit more.
6
Geeze. Starbucks sells good coffee. It may not be the best, and it's always nice to support smaller places, but the reason it does well probably has something to do that decent coffee. Especially when you travel -- you can count on getting the same coffee just about anywhere, and that's a big plus.
7
It looks like their store traffic was pretty flat, but they managed to really raise the average sale by pushing instant coffee packets.
8
I attribute all their success to this:
They stopped calling me "Sir" when ever I order a venti drip.
A little goes a long way...
9
Starbucks actually helps independent cafes, even when they move in right across the street from an established coffee house. Starbucks advertising brings the idea of espresso drinks to people who never considered it before. Some of them go to Starbucks, and some of them go to the coffee house across the street, increasing sales. It drives Starbucks crazy that they are making the local shops thrive, rather than killing them off.
There have been lots of stories about this, so I won't post links. Google it.
There have been lots of stories about this, so I won't post links. Google it.
10
@3: Thanks for the link.
I live barely 2 blocks away from 15th Ave Coffee & Tea, and will not become a patron. After they first opened, I walked in and did check it out because I was curious.
I do love the clothespin chandelier. But overall, it feels like something new that's attempting to create history. It has some character (a few nice touches) but falls short of authenticity.
I can appreciate a corporation doing what it needs to for profit. Up to a point.
There's a small sign on the door that says "...inspired by Starbucks." And that's the reason they won't get money from me.
It's about honesty. It's about giving credit where credit is due. The sign SHOULD say "Owned by Starbucks and inspired by Seattle's independent coffee shops."
From what I've read, they spent much time in Victrola, clipboard in hand, observing. Who knows how many other shops they checked out?
Starbucks, a large corporation, even with their massive growth, realized it couldn't tap into a certain market. And so, they decided to offer shops similar to that very market. I don't have a problem with that but do have a problem with a subtle form of deception.
Own up to it.
That's all.
I live barely 2 blocks away from 15th Ave Coffee & Tea, and will not become a patron. After they first opened, I walked in and did check it out because I was curious.
I do love the clothespin chandelier. But overall, it feels like something new that's attempting to create history. It has some character (a few nice touches) but falls short of authenticity.
I can appreciate a corporation doing what it needs to for profit. Up to a point.
There's a small sign on the door that says "...inspired by Starbucks." And that's the reason they won't get money from me.
It's about honesty. It's about giving credit where credit is due. The sign SHOULD say "Owned by Starbucks and inspired by Seattle's independent coffee shops."
From what I've read, they spent much time in Victrola, clipboard in hand, observing. Who knows how many other shops they checked out?
Starbucks, a large corporation, even with their massive growth, realized it couldn't tap into a certain market. And so, they decided to offer shops similar to that very market. I don't have a problem with that but do have a problem with a subtle form of deception.
Own up to it.
That's all.
12
the firm has also won back customers in its home market.
That's pretty easy to do when everyone else has gone under.
That's pretty easy to do when everyone else has gone under.
13
There have been plenty of times when I've had to tolerate terrible coffee outside the northwest, and have been so relieved to see a Starbucks that I practically thanked the baristas simply for existing. When I'm at home, I patronize local roasters. But for travel, Starbucks wins me over every time. Besides, I was living in Seattle during the initial emergence of Starbucks, and it seemed much more like "local boy makes good" than "evil corporation takes over the world."
14
http://www.valueline.com.ezproxy.spl.org…
Value Line projects SBUX to nearly double in price by 2014. The sales and earnings growth will be single digit percentages, but the stock is viewed as a momentum play and its returns on capital and shareholder equity are very good and expected to grow.
Value Line projects SBUX to nearly double in price by 2014. The sales and earnings growth will be single digit percentages, but the stock is viewed as a momentum play and its returns on capital and shareholder equity are very good and expected to grow.
15
@13 reminded me: I remember when there were TWO Starbucks. I used to go with my dad when he went to get beans from the U-Village store. There'd usually be some bearded guy with sandals & a ponytail (& maybe fleas) working behind the counter. And that's my Andy Rooney moment.
16
"Starbucks actually helps independent cafes, even when they move in right across the street from an established coffee house. Starbucks advertising brings the idea of espresso drinks to people who never considered it before. Some of them go to Starbucks, and some of them go to the coffee house across the street, increasing sales. It drives Starbucks crazy that they are making the local shops thrive, rather than killing them off.
There have been lots of stories about this, so I won't post links. Google it. "
Ahahhaahhahahahahahahhahhaaaahahahhahahaa except for the predatory store openings and closings.
I'm all for "local" (if you can still call it that) companies being successful, but if you think they've been good for competition you're ridiculously stupid.
There have been lots of stories about this, so I won't post links. Google it. "
Ahahhaahhahahahahahahhahhaaaahahahhahahaa except for the predatory store openings and closings.
I'm all for "local" (if you can still call it that) companies being successful, but if you think they've been good for competition you're ridiculously stupid.
19
@16, Elenchos is mostly right. The only places that fall victim to "predatory store openings" are completely shit to begin with, as are many independent coffee houses, especially in the sticks or in relatively unsophisticated cities. How many times have you ordered a coffee drink in some out of the way place and gotten a cup of the worst dreck in the universe? Places like that are begging to be driven out of business. This is much more of a problem if you drink milk drinks with coffee in them, but still. I would say that nationwide fewer than 25% of all coffee houses have anyone on staff who knows how to make a passable espresso. We're a bit spoiled here in Seattle.
20
I never got the entire hatred of Starbucks on Slog. Of all of the local big companies they are by far the least evil of all of them. But for some strange reason the hipsters (or wannabes like Charles) act like little vindictive bitches hoping that Starbucks will go under.
Wish they had the same outrage over Boeing (they build weapons of war that kill the innocent) Microsoft (they go out of their way to smash any competition by any means that they can and far more unethically than Starbucks has) and that lumber company that does more environmental damage than most of us could hope to accomplish in a lifetime.
My hope is that if the Stranger folds Charles can only find a job as a barista at Starbucks.
Wish they had the same outrage over Boeing (they build weapons of war that kill the innocent) Microsoft (they go out of their way to smash any competition by any means that they can and far more unethically than Starbucks has) and that lumber company that does more environmental damage than most of us could hope to accomplish in a lifetime.
My hope is that if the Stranger folds Charles can only find a job as a barista at Starbucks.
21
i think the profit is related to its instant coffee line, via. its been under r&d for many many years and that is just a money drain and now its making money, instant coffee is the biggest coffee market in the world. Its a guess, but its an educated guess (its a fact that instant coffee is a bigger market than regular or espresso not sure maybe decaf is bigger)
22
Ho hum .... but wait .... their international HQ is in Seattle, so this means jobs.
Wow, and maybe ad revenue for the Stranger.
Wow, again.
We are all connected to the economy, selling whatever.
Hanging out is my excuse to drink their stuff. I am not a coffee addict.
Wow, and maybe ad revenue for the Stranger.
Wow, again.
We are all connected to the economy, selling whatever.
Hanging out is my excuse to drink their stuff. I am not a coffee addict.
23
and the amazing thing is that VIA is really good in those out-of-town far-from-a-professional-barista situations.
24
yes, lets take down the evil corporation!! oh wait, they are a local company that provides good jobs to the citizens of this state...damn.
Oh well! EVIL CORPORATION!!!
but...but...they provide profit sharing and health care and have recognized same sex couples as partners for years and offered those couples the same benefits that they did married hetero couples....
EVIL!!!!
sigh...
Oh well! EVIL CORPORATION!!!
but...but...they provide profit sharing and health care and have recognized same sex couples as partners for years and offered those couples the same benefits that they did married hetero couples....
EVIL!!!!
sigh...
25
1)Idiots and snobby hipsters hate Starbucks...if you don't like them, don't give them your money, but the whole "Evil Corporation" thing is so tired, cliche and third-grade faux liberalism...I don't like their coffee much but I love the fact they're THERE when you need them when you're stuck in the 99% of the the rest of the world that DOESNT have indie coffee shops on every corner like the Pacific NW...also, the whole they employ thousands of locals and help our economy thrive thing.
2)@12 Who has gone under in Seattle? Several of the other chains died or were bought by Starbucks, (Seattles Best Coffee) but I can't think of any local indies that have bit the dust...Coffee shops are about the only sure-fire retail business in Seattle.
2)@12 Who has gone under in Seattle? Several of the other chains died or were bought by Starbucks, (Seattles Best Coffee) but I can't think of any local indies that have bit the dust...Coffee shops are about the only sure-fire retail business in Seattle.
26
and, at one point does a corporation become "evil"? Starbucks started in Seattle and gradually grew; did they become evil at 10 stores? 20? 50? When they crossed statelines or had stores in more than 3 states? When they opened their first non-US location? What exactly is the defining point when they "turn"?
McMenamins is local and now has hotels in two states with 8 locations...do they turn evil if they open in California or BC or when they open their 12th location? What about everyone's beloved Linda Derschong...she owns how many venues in Seattle? If she opens a place in Boise, does she grow horns?
Dumb.
McMenamins is local and now has hotels in two states with 8 locations...do they turn evil if they open in California or BC or when they open their 12th location? What about everyone's beloved Linda Derschong...she owns how many venues in Seattle? If she opens a place in Boise, does she grow horns?
Dumb.
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