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Main
Date: 04 Aug 2006 11:37:14
From:
Subject: $tarbucks $stumble - Wall Street Journal Analysis 8-4-2006
|
Are Frappuccino Woes or Frugality To Blame for Starbucks's Stumble?
By JANET ADAMY
Wall Street Journal August 4, 2006; Page A1
By transforming coffee from a humdrum commodity to an indulgent -- but
affordable -- ritual, Starbucks Corp. seemed to have found a recipe
for robust sales no matter how the U.S. economy was doing.
But for the first time, there are a few signs that Starbucks's
remarkable growth -- which turned a local Seattle coffee shop into a
global giant -- may be making it more vulnerable to pressures on
consumer spending.
Late Wednesday, the chain said sales in stores open at least 13
months, a closely watched measure, rose just 4% in July, that smallest
increase in nearly five years. That followed several months in which
same-store sales, while higher, still fell below the 8% to 10% to
which investors had grown accustomed.
While a 4% sales increase would be considered terrific at many
restaurant chains, the Starbucks news prompted an investor selloff.
Even though the company reported Wednesday that third-quarter net
income rose 16%, its shares yesterday tumbled 8%, or $2.66, on heavy
volume to $30.64 in 4 p.m. trading on the Nasdaq Stock Market.
Executives seemed baffled by the fall, saying that the real news was
their plan to open at least 2,000 stores during the current fiscal
year, which ends Sept. 30 -- at least 200 more than previously
announced -- and move forward on expanding in India and Russia. "Those
are the indicators for us that we're in control of our business,"
Chief Executive Jim Donald said in an interview.
Starbucks blamed the weak July sales growth on unexpectedly heavy
demand for cold, sweet Frappuccinos in the morning, spurred by heat
waves across the country. Frappuccinos take longer to prepare than
most drinks because they are mixed in a blender, topped with whipped
cream and drizzled with sweet toppings. That made Starbucks's
frequently long lines even longer, driving away customers, the chain
said.
But some industry analysts are wondering if there is a deeper issue --
that Starbucks, long a Wall Street darling because of its rapid growth
and ability to demand premium prices, may be maturing into a more
typical company that is at risk of a cold whenever consumers sneeze.
Recent expansion has brought Starbucks into more small towns, inner
cities and spots off the freeway. While that has broadened its
customer base, it also may leave the chain more exposed to customers
who cut back on extras when gasoline prices climb and credit-card
bills mount.
Such cutbacks already have helped induce a downturn across the
restaurant industry, with chains such as Applebee's International
Inc., Cheesecake Factory Inc. and Yum Brands Inc.'s KFC complaining
that customers strapped by high fuel prices are limiting their dining
out.
"We've been going through one of the most wrenching downturns we've
seen in restaurant history," said John Glass, an analyst with CIBC
World Markets in Boston who follows the dining sector. "It is
beginning to leach into a name like Starbucks, which has historically
been immune to this."
Starbucks's Mr. Donald dismissed the notion that slowing sales growth
is due to "macroeconomic" trends. "We're not just a shop to buy from,"
he said. "We've always said that Starbucks is an affordable luxury.
We're that connection that, during these times, times of concern,
customers come through our doors and have that respite."
Still, the company also points out that its customer base has
broadened substantially.
Starbucks started with one store in Seattle's Pike Place Market in
1971. During its first wave of expansion in the 1990s, it focused on
metropolitan areas with dense populations. But over the past several
years, it has been targeting smaller towns like Flint, Mich., and
sprinkling locations alongside freeways.
The chain now operates more than 11,000 locations world-wide. "Our
customer base is much, much broader today than it's ever been,"
Starbucks Chairman Howard Schultz told investors during a conference
call Wednesday.
At least some customers say that they have been cutting back on their
Starbucks drinks lately. In many areas, medium ("grande," in Starbucks
parlance) and large ("venti") sizes of espresso-based beverages like
lattes top $4 each.
Jason Huff
Lines were long at lower Manhattan Starbucks stores on Thursday, fed
in part by iced-coffee giveaways.
Allison Ryan, a paralegal at a Chicago law firm, says she has bought a
small, or "tall," Chai tea at Starbucks every other day for the past
two years, spending about $60 a month. But a couple of months ago,
rising gas prices prompted her to cut down to one Starbucks indulgence
every three weeks. "It's more of a treat now," she said.
A fellow paralegal, Cheryl Bartelt, 46, says she always used to pick
up a Starbucks grande cappuccino on her way to work, but has been
making her morning coffee at home since her weekly gasoline bill shot
to nearly $100 from $60. "You've got to cut corners somewhere," she
said.
Analysts say Starbucks also may be losing some business to McDonald's
Corp., which began marketing upgraded coffee this spring, and Dunkin'
Brands Inc.'s Dunkin' Donuts chain, which plans a national expansion
and is redesigning its stores to improve aesthetics.
Additionally, despite the popularity of lattes, the percentage of
Americans who drink coffee with breakfast has been declining for at
least 15 years. Only 37.7% of consumers say they are breakfast coffee
drinkers, down from 48.7% in 1990, according to NPD Group, a market
research firm.
Hard times haven't hurt Starbucks stores in the past, Mr. Donald said.
Locations in Flint are reporting strong sales, he said, despite the
auto industry's woes and long-term economic malaise in that city. In
London, sales rebounded quickly after last year's terrorist bombings
because customers sought comfort in Starbucks, he said.
Executives also say that the slower sales growth is overshadowing the
more important story of the chain's rapid unit growth and strong
earnings. Starbucks aims one day to operate 30,000 stores and sees
China, Brazil, India and Russia as attractive markets for growth.
Starbucks says building more stores also will help to whittle down
long lines, a persistent problem for the chain even before new
banana-flavored and juice Frappuccinos stretched wait times this
summer. Mr. Donald said Starbucks is deploying cold-beverage stations
that include automatic pitcher washers and faster blenders that will
speed Frappuccino preparation.
Still, its trouble with the labor-intensive Frappuccinos has stoked
investor concerns that Starbucks has complicated its menu to the point
that the stores suffer. Starbucks has been adding lunch items and hot
breakfast sandwiches in some stores and pushing CDs and books.
Executives concede that recent projects like Starbucks's promotion of
the film "Akeelah and the Bee" didn't result in very high receipts at
the box office. But Mr. Donald said menu expansions are adding to
sales, not detracting.
If any factor besides the longer lines is hurting sales growth, he
said, it is high temperatures. "It's 114 [degree] heat index today in
New York City," Mr. Donald said. "People are just maybe not getting
out."
|
|
| |
Date: 04 Aug 2006 10:09:59
From: daveb
Subject: Re: $tarbucks $stumble - Wall Street Journal Analysis 8-4-2006
|
Geez! thanks for the cut and paste.
Is this supposed to cause happiness? or sadness?
why do you bother?
Dave
96
alt.coffee wrote:
> Are Frappuccino Woes or Frugality To Blame for Starbucks's Stumble?
>
> By JANET ADAMY
>
> Wall Street Journal August 4, 2006; Page A1
>
> By transforming coffee from a humdrum commodity to an indulgent -- but
> affordable -- ritual, Starbucks Corp. seemed to have found a recipe
> for robust sales no matter how the U.S. economy was doing.
>
> But for the first time, there are a few signs that Starbucks's
> remarkable growth -- which turned a local Seattle coffee shop into a
> global giant -- may be making it more vulnerable to pressures on
> consumer spending.
>
> Late Wednesday, the chain said sales in stores open at least 13
> months, a closely watched measure, rose just 4% in July, that smallest
> increase in nearly five years. That followed several months in which
> same-store sales, while higher, still fell below the 8% to 10% to
> which investors had grown accustomed.
>
> While a 4% sales increase would be considered terrific at many
> restaurant chains, the Starbucks news prompted an investor selloff.
> Even though the company reported Wednesday that third-quarter net
> income rose 16%, its shares yesterday tumbled 8%, or $2.66, on heavy
> volume to $30.64 in 4 p.m. trading on the Nasdaq Stock Market.
>
> Executives seemed baffled by the fall, saying that the real news was
> their plan to open at least 2,000 stores during the current fiscal
> year, which ends Sept. 30 -- at least 200 more than previously
> announced -- and move forward on expanding in India and Russia. "Those
> are the indicators for us that we're in control of our business,"
> Chief Executive Jim Donald said in an interview.
>
> Starbucks blamed the weak July sales growth on unexpectedly heavy
> demand for cold, sweet Frappuccinos in the morning, spurred by heat
> waves across the country. Frappuccinos take longer to prepare than
> most drinks because they are mixed in a blender, topped with whipped
> cream and drizzled with sweet toppings. That made Starbucks's
> frequently long lines even longer, driving away customers, the chain
> said.
>
> But some industry analysts are wondering if there is a deeper issue --
> that Starbucks, long a Wall Street darling because of its rapid growth
> and ability to demand premium prices, may be maturing into a more
> typical company that is at risk of a cold whenever consumers sneeze.
>
> Recent expansion has brought Starbucks into more small towns, inner
> cities and spots off the freeway. While that has broadened its
> customer base, it also may leave the chain more exposed to customers
> who cut back on extras when gasoline prices climb and credit-card
> bills mount.
>
> Such cutbacks already have helped induce a downturn across the
> restaurant industry, with chains such as Applebee's International
> Inc., Cheesecake Factory Inc. and Yum Brands Inc.'s KFC complaining
> that customers strapped by high fuel prices are limiting their dining
> out.
>
> "We've been going through one of the most wrenching downturns we've
> seen in restaurant history," said John Glass, an analyst with CIBC
> World Markets in Boston who follows the dining sector. "It is
> beginning to leach into a name like Starbucks, which has historically
> been immune to this."
>
> Starbucks's Mr. Donald dismissed the notion that slowing sales growth
> is due to "macroeconomic" trends. "We're not just a shop to buy from,"
> he said. "We've always said that Starbucks is an affordable luxury.
> We're that connection that, during these times, times of concern,
> customers come through our doors and have that respite."
>
> Still, the company also points out that its customer base has
> broadened substantially.
>
> Starbucks started with one store in Seattle's Pike Place Market in
> 1971. During its first wave of expansion in the 1990s, it focused on
> metropolitan areas with dense populations. But over the past several
> years, it has been targeting smaller towns like Flint, Mich., and
> sprinkling locations alongside freeways.
>
> The chain now operates more than 11,000 locations world-wide. "Our
> customer base is much, much broader today than it's ever been,"
> Starbucks Chairman Howard Schultz told investors during a conference
> call Wednesday.
>
> At least some customers say that they have been cutting back on their
> Starbucks drinks lately. In many areas, medium ("grande," in Starbucks
> parlance) and large ("venti") sizes of espresso-based beverages like
> lattes top $4 each.
> Jason Huff
> Lines were long at lower Manhattan Starbucks stores on Thursday, fed
> in part by iced-coffee giveaways.
>
>
> Allison Ryan, a paralegal at a Chicago law firm, says she has bought a
> small, or "tall," Chai tea at Starbucks every other day for the past
> two years, spending about $60 a month. But a couple of months ago,
> rising gas prices prompted her to cut down to one Starbucks indulgence
> every three weeks. "It's more of a treat now," she said.
>
> A fellow paralegal, Cheryl Bartelt, 46, says she always used to pick
> up a Starbucks grande cappuccino on her way to work, but has been
> making her morning coffee at home since her weekly gasoline bill shot
> to nearly $100 from $60. "You've got to cut corners somewhere," she
> said.
>
> Analysts say Starbucks also may be losing some business to McDonald's
> Corp., which began marketing upgraded coffee this spring, and Dunkin'
> Brands Inc.'s Dunkin' Donuts chain, which plans a national expansion
> and is redesigning its stores to improve aesthetics.
>
> Additionally, despite the popularity of lattes, the percentage of
> Americans who drink coffee with breakfast has been declining for at
> least 15 years. Only 37.7% of consumers say they are breakfast coffee
> drinkers, down from 48.7% in 1990, according to NPD Group, a market
> research firm.
>
> Hard times haven't hurt Starbucks stores in the past, Mr. Donald said.
> Locations in Flint are reporting strong sales, he said, despite the
> auto industry's woes and long-term economic malaise in that city. In
> London, sales rebounded quickly after last year's terrorist bombings
> because customers sought comfort in Starbucks, he said.
>
> Executives also say that the slower sales growth is overshadowing the
> more important story of the chain's rapid unit growth and strong
> earnings. Starbucks aims one day to operate 30,000 stores and sees
> China, Brazil, India and Russia as attractive markets for growth.
>
> Starbucks says building more stores also will help to whittle down
> long lines, a persistent problem for the chain even before new
> banana-flavored and juice Frappuccinos stretched wait times this
> summer. Mr. Donald said Starbucks is deploying cold-beverage stations
> that include automatic pitcher washers and faster blenders that will
> speed Frappuccino preparation.
>
> Still, its trouble with the labor-intensive Frappuccinos has stoked
> investor concerns that Starbucks has complicated its menu to the point
> that the stores suffer. Starbucks has been adding lunch items and hot
> breakfast sandwiches in some stores and pushing CDs and books.
> Executives concede that recent projects like Starbucks's promotion of
> the film "Akeelah and the Bee" didn't result in very high receipts at
> the box office. But Mr. Donald said menu expansions are adding to
> sales, not detracting.
>
> If any factor besides the longer lines is hurting sales growth, he
> said, it is high temperatures. "It's 114 [degree] heat index today in
> New York City," Mr. Donald said. "People are just maybe not getting
> out."
|
| | |
Date: 04 Aug 2006 13:50:53
From: Steven Bookman
Subject: Re: $tarbucks $stumble - Wall Street Journal Analysis 8-4-2006
|
On 4 Aug 2006 10:09:59 -0700, "daveb" <davebobblane@gmail.com > wrote:
>Geez! thanks for the cut and paste.
>
>
>Is this supposed to cause happiness? or sadness?
>
>why do you bother?
>
>Dave
>96
You made such a good case for not reproducing the
entire original that you reprinted it in your hot under the
collar, ill termpered article.
What a dickhead ,,,,
|
| |
Date: 04 Aug 2006 17:16:42
From: Jack Denver
Subject: Re: $tarbucks $stumble - Wall Street Journal Analysis 8-4-2006
|
Sucess has a thousand fathers, failure is an orphan. If *$ had increased
sales, it would have been due to their brilliant management, creative
marketing, etc. But a decline in sales is due to underlying economic trends
and forces beyond their control.
<alt.coffee > wrote in message
news:v8q6d2dcjq7kbuqikldrjlf860bg3ol6is@4ax.com...
>
>
>
> Are Frappuccino Woes or Frugality To Blame for Starbucks's Stumble?
>
> By JANET ADAMY
>
> Wall Street Journal August 4, 2006; Page A1
>
> By transforming coffee from a humdrum commodity to an indulgent -- but
> affordable -- ritual, Starbucks Corp. seemed to have found a recipe
> for robust sales no matter how the U.S. economy was doing.
>
> But for the first time, there are a few signs that Starbucks's
> remarkable growth -- which turned a local Seattle coffee shop into a
> global giant -- may be making it more vulnerable to pressures on
> consumer spending.
>
> Late Wednesday, the chain said sales in stores open at least 13
> months, a closely watched measure, rose just 4% in July, that smallest
> increase in nearly five years. That followed several months in which
> same-store sales, while higher, still fell below the 8% to 10% to
> which investors had grown accustomed.
>
> While a 4% sales increase would be considered terrific at many
> restaurant chains, the Starbucks news prompted an investor selloff.
> Even though the company reported Wednesday that third-quarter net
> income rose 16%, its shares yesterday tumbled 8%, or $2.66, on heavy
> volume to $30.64 in 4 p.m. trading on the Nasdaq Stock Market.
>
> Executives seemed baffled by the fall, saying that the real news was
> their plan to open at least 2,000 stores during the current fiscal
> year, which ends Sept. 30 -- at least 200 more than previously
> announced -- and move forward on expanding in India and Russia. "Those
> are the indicators for us that we're in control of our business,"
> Chief Executive Jim Donald said in an interview.
>
> Starbucks blamed the weak July sales growth on unexpectedly heavy
> demand for cold, sweet Frappuccinos in the morning, spurred by heat
> waves across the country. Frappuccinos take longer to prepare than
> most drinks because they are mixed in a blender, topped with whipped
> cream and drizzled with sweet toppings. That made Starbucks's
> frequently long lines even longer, driving away customers, the chain
> said.
>
> But some industry analysts are wondering if there is a deeper issue --
> that Starbucks, long a Wall Street darling because of its rapid growth
> and ability to demand premium prices, may be maturing into a more
> typical company that is at risk of a cold whenever consumers sneeze.
>
> Recent expansion has brought Starbucks into more small towns, inner
> cities and spots off the freeway. While that has broadened its
> customer base, it also may leave the chain more exposed to customers
> who cut back on extras when gasoline prices climb and credit-card
> bills mount.
>
> Such cutbacks already have helped induce a downturn across the
> restaurant industry, with chains such as Applebee's International
> Inc., Cheesecake Factory Inc. and Yum Brands Inc.'s KFC complaining
> that customers strapped by high fuel prices are limiting their dining
> out.
>
> "We've been going through one of the most wrenching downturns we've
> seen in restaurant history," said John Glass, an analyst with CIBC
> World Markets in Boston who follows the dining sector. "It is
> beginning to leach into a name like Starbucks, which has historically
> been immune to this."
>
> Starbucks's Mr. Donald dismissed the notion that slowing sales growth
> is due to "macroeconomic" trends. "We're not just a shop to buy from,"
> he said. "We've always said that Starbucks is an affordable luxury.
> We're that connection that, during these times, times of concern,
> customers come through our doors and have that respite."
>
> Still, the company also points out that its customer base has
> broadened substantially.
>
> Starbucks started with one store in Seattle's Pike Place Market in
> 1971. During its first wave of expansion in the 1990s, it focused on
> metropolitan areas with dense populations. But over the past several
> years, it has been targeting smaller towns like Flint, Mich., and
> sprinkling locations alongside freeways.
>
> The chain now operates more than 11,000 locations world-wide. "Our
> customer base is much, much broader today than it's ever been,"
> Starbucks Chairman Howard Schultz told investors during a conference
> call Wednesday.
>
> At least some customers say that they have been cutting back on their
> Starbucks drinks lately. In many areas, medium ("grande," in Starbucks
> parlance) and large ("venti") sizes of espresso-based beverages like
> lattes top $4 each.
> Jason Huff
> Lines were long at lower Manhattan Starbucks stores on Thursday, fed
> in part by iced-coffee giveaways.
>
>
> Allison Ryan, a paralegal at a Chicago law firm, says she has bought a
> small, or "tall," Chai tea at Starbucks every other day for the past
> two years, spending about $60 a month. But a couple of months ago,
> rising gas prices prompted her to cut down to one Starbucks indulgence
> every three weeks. "It's more of a treat now," she said.
>
> A fellow paralegal, Cheryl Bartelt, 46, says she always used to pick
> up a Starbucks grande cappuccino on her way to work, but has been
> making her morning coffee at home since her weekly gasoline bill shot
> to nearly $100 from $60. "You've got to cut corners somewhere," she
> said.
>
> Analysts say Starbucks also may be losing some business to McDonald's
> Corp., which began marketing upgraded coffee this spring, and Dunkin'
> Brands Inc.'s Dunkin' Donuts chain, which plans a national expansion
> and is redesigning its stores to improve aesthetics.
>
> Additionally, despite the popularity of lattes, the percentage of
> Americans who drink coffee with breakfast has been declining for at
> least 15 years. Only 37.7% of consumers say they are breakfast coffee
> drinkers, down from 48.7% in 1990, according to NPD Group, a market
> research firm.
>
> Hard times haven't hurt Starbucks stores in the past, Mr. Donald said.
> Locations in Flint are reporting strong sales, he said, despite the
> auto industry's woes and long-term economic malaise in that city. In
> London, sales rebounded quickly after last year's terrorist bombings
> because customers sought comfort in Starbucks, he said.
>
> Executives also say that the slower sales growth is overshadowing the
> more important story of the chain's rapid unit growth and strong
> earnings. Starbucks aims one day to operate 30,000 stores and sees
> China, Brazil, India and Russia as attractive markets for growth.
>
> Starbucks says building more stores also will help to whittle down
> long lines, a persistent problem for the chain even before new
> banana-flavored and juice Frappuccinos stretched wait times this
> summer. Mr. Donald said Starbucks is deploying cold-beverage stations
> that include automatic pitcher washers and faster blenders that will
> speed Frappuccino preparation.
>
> Still, its trouble with the labor-intensive Frappuccinos has stoked
> investor concerns that Starbucks has complicated its menu to the point
> that the stores suffer. Starbucks has been adding lunch items and hot
> breakfast sandwiches in some stores and pushing CDs and books.
> Executives concede that recent projects like Starbucks's promotion of
> the film "Akeelah and the Bee" didn't result in very high receipts at
> the box office. But Mr. Donald said menu expansions are adding to
> sales, not detracting.
>
> If any factor besides the longer lines is hurting sales growth, he
> said, it is high temperatures. "It's 114 [degree] heat index today in
> New York City," Mr. Donald said. "People are just maybe not getting
> out."
|
| | |
Date: 04 Aug 2006 19:20:01
From: J. Clarke
Subject: Re: $tarbucks $stumble - Wall Street Journal Analysis 8-4-2006
|
Jack Denver wrote:
> Sucess has a thousand fathers, failure is an orphan. If *$ had increased
> sales, it would have been due to their brilliant management, creative
> marketing, etc. But a decline in sales is due to underlying economic
> trends and forces beyond their control.
Uh, they did increase sales. Just not as much as expected.
> <alt.coffee> wrote in message
> news:v8q6d2dcjq7kbuqikldrjlf860bg3ol6is@4ax.com...
>>
>>
>>
>> Are Frappuccino Woes or Frugality To Blame for Starbucks's Stumble?
>>
>> By JANET ADAMY
>>
>> Wall Street Journal August 4, 2006; Page A1
>>
>> By transforming coffee from a humdrum commodity to an indulgent -- but
>> affordable -- ritual, Starbucks Corp. seemed to have found a recipe
>> for robust sales no matter how the U.S. economy was doing.
>>
>> But for the first time, there are a few signs that Starbucks's
>> remarkable growth -- which turned a local Seattle coffee shop into a
>> global giant -- may be making it more vulnerable to pressures on
>> consumer spending.
>>
>> Late Wednesday, the chain said sales in stores open at least 13
>> months, a closely watched measure, rose just 4% in July, that smallest
>> increase in nearly five years. That followed several months in which
>> same-store sales, while higher, still fell below the 8% to 10% to
>> which investors had grown accustomed.
>>
>> While a 4% sales increase would be considered terrific at many
>> restaurant chains, the Starbucks news prompted an investor selloff.
>> Even though the company reported Wednesday that third-quarter net
>> income rose 16%, its shares yesterday tumbled 8%, or $2.66, on heavy
>> volume to $30.64 in 4 p.m. trading on the Nasdaq Stock Market.
>>
>> Executives seemed baffled by the fall, saying that the real news was
>> their plan to open at least 2,000 stores during the current fiscal
>> year, which ends Sept. 30 -- at least 200 more than previously
>> announced -- and move forward on expanding in India and Russia. "Those
>> are the indicators for us that we're in control of our business,"
>> Chief Executive Jim Donald said in an interview.
>>
>> Starbucks blamed the weak July sales growth on unexpectedly heavy
>> demand for cold, sweet Frappuccinos in the morning, spurred by heat
>> waves across the country. Frappuccinos take longer to prepare than
>> most drinks because they are mixed in a blender, topped with whipped
>> cream and drizzled with sweet toppings. That made Starbucks's
>> frequently long lines even longer, driving away customers, the chain
>> said.
>>
>> But some industry analysts are wondering if there is a deeper issue --
>> that Starbucks, long a Wall Street darling because of its rapid growth
>> and ability to demand premium prices, may be maturing into a more
>> typical company that is at risk of a cold whenever consumers sneeze.
>>
>> Recent expansion has brought Starbucks into more small towns, inner
>> cities and spots off the freeway. While that has broadened its
>> customer base, it also may leave the chain more exposed to customers
>> who cut back on extras when gasoline prices climb and credit-card
>> bills mount.
>>
>> Such cutbacks already have helped induce a downturn across the
>> restaurant industry, with chains such as Applebee's International
>> Inc., Cheesecake Factory Inc. and Yum Brands Inc.'s KFC complaining
>> that customers strapped by high fuel prices are limiting their dining
>> out.
>>
>> "We've been going through one of the most wrenching downturns we've
>> seen in restaurant history," said John Glass, an analyst with CIBC
>> World Markets in Boston who follows the dining sector. "It is
>> beginning to leach into a name like Starbucks, which has historically
>> been immune to this."
>>
>> Starbucks's Mr. Donald dismissed the notion that slowing sales growth
>> is due to "macroeconomic" trends. "We're not just a shop to buy from,"
>> he said. "We've always said that Starbucks is an affordable luxury.
>> We're that connection that, during these times, times of concern,
>> customers come through our doors and have that respite."
>>
>> Still, the company also points out that its customer base has
>> broadened substantially.
>>
>> Starbucks started with one store in Seattle's Pike Place Market in
>> 1971. During its first wave of expansion in the 1990s, it focused on
>> metropolitan areas with dense populations. But over the past several
>> years, it has been targeting smaller towns like Flint, Mich., and
>> sprinkling locations alongside freeways.
>>
>> The chain now operates more than 11,000 locations world-wide. "Our
>> customer base is much, much broader today than it's ever been,"
>> Starbucks Chairman Howard Schultz told investors during a conference
>> call Wednesday.
>>
>> At least some customers say that they have been cutting back on their
>> Starbucks drinks lately. In many areas, medium ("grande," in Starbucks
>> parlance) and large ("venti") sizes of espresso-based beverages like
>> lattes top $4 each.
>> Jason Huff
>> Lines were long at lower Manhattan Starbucks stores on Thursday, fed
>> in part by iced-coffee giveaways.
>>
>>
>> Allison Ryan, a paralegal at a Chicago law firm, says she has bought a
>> small, or "tall," Chai tea at Starbucks every other day for the past
>> two years, spending about $60 a month. But a couple of months ago,
>> rising gas prices prompted her to cut down to one Starbucks indulgence
>> every three weeks. "It's more of a treat now," she said.
>>
>> A fellow paralegal, Cheryl Bartelt, 46, says she always used to pick
>> up a Starbucks grande cappuccino on her way to work, but has been
>> making her morning coffee at home since her weekly gasoline bill shot
>> to nearly $100 from $60. "You've got to cut corners somewhere," she
>> said.
>>
>> Analysts say Starbucks also may be losing some business to McDonald's
>> Corp., which began marketing upgraded coffee this spring, and Dunkin'
>> Brands Inc.'s Dunkin' Donuts chain, which plans a national expansion
>> and is redesigning its stores to improve aesthetics.
>>
>> Additionally, despite the popularity of lattes, the percentage of
>> Americans who drink coffee with breakfast has been declining for at
>> least 15 years. Only 37.7% of consumers say they are breakfast coffee
>> drinkers, down from 48.7% in 1990, according to NPD Group, a market
>> research firm.
>>
>> Hard times haven't hurt Starbucks stores in the past, Mr. Donald said.
>> Locations in Flint are reporting strong sales, he said, despite the
>> auto industry's woes and long-term economic malaise in that city. In
>> London, sales rebounded quickly after last year's terrorist bombings
>> because customers sought comfort in Starbucks, he said.
>>
>> Executives also say that the slower sales growth is overshadowing the
>> more important story of the chain's rapid unit growth and strong
>> earnings. Starbucks aims one day to operate 30,000 stores and sees
>> China, Brazil, India and Russia as attractive markets for growth.
>>
>> Starbucks says building more stores also will help to whittle down
>> long lines, a persistent problem for the chain even before new
>> banana-flavored and juice Frappuccinos stretched wait times this
>> summer. Mr. Donald said Starbucks is deploying cold-beverage stations
>> that include automatic pitcher washers and faster blenders that will
>> speed Frappuccino preparation.
>>
>> Still, its trouble with the labor-intensive Frappuccinos has stoked
>> investor concerns that Starbucks has complicated its menu to the point
>> that the stores suffer. Starbucks has been adding lunch items and hot
>> breakfast sandwiches in some stores and pushing CDs and books.
>> Executives concede that recent projects like Starbucks's promotion of
>> the film "Akeelah and the Bee" didn't result in very high receipts at
>> the box office. But Mr. Donald said menu expansions are adding to
>> sales, not detracting.
>>
>> If any factor besides the longer lines is hurting sales growth, he
>> said, it is high temperatures. "It's 114 [degree] heat index today in
>> New York City," Mr. Donald said. "People are just maybe not getting
>> out."
--
--John
to email, dial "usenet" and validate
(was jclarke at eye bee em dot net)
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Date: 04 Aug 2006 14:57:30
From: Johnny
Subject: Re: $tarbucks $stumble - Wall Street Journal Analysis 8-4-2006
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"Jack Denver" <nunuvyer@netscape.net > wrote in message
news:FsOdndDjFeemJE7ZnZ2dnUVZ_rKdnZ2d@comcast.com...
> Sucess has a thousand fathers, failure is an orphan. If *$ had increased
> sales, it would have been due to their brilliant management, creative
> marketing, etc. But a decline in sales is due to underlying economic
trends
> and forces beyond their control.
>
Wise words Jack :-)
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Date: 05 Aug 2006 14:24:41
From: daveb
Subject: Re: $tarbucks $stumble - Wall Street Journal Analysis 8-4-2006
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Oooh, what a tough guy.
a shame. . . .
Dave
Steven Bookman wrote:
>
>
> What a dickhead ,,,,
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