Starbucks announces it will close 100 stores

[Omaha Steve]

Source: Nashville Business Journal

Starbucks Corp. announced it will close 100 stores and slow down its opening of new U.S. stores from 1,600 to 1,175 this year.

"By reducing the number of openings, we expect to optimize our resources and potentially reduce cannibalization of our existing stores," says CEO and Chairman Howard Schultz in a statement.

Schultz did not say if any of the store closings would take place in Middle Tennessee.

The Seattle coffee giant announced the closings and slowdown plan when reporting its first-quarter earnings increased 2 percent, to $208 million, or 28 cents a share, from $205 million, or 26 cents a share, in 2006. Total revenues rose to $2.8 billion from $2.4 billion a year earlier. Analysts polled by Thomson Financial Network expected first-quarter earnings of 27 cents per share and revenue of $2.8 billion.

Read more: http://www.bizjournals.com/nashville/stories/2008/01/28/daily28.html

[LeftinOH]

1. Overextended themselves, maybe.....?

[wordpix]

2. well if they weren't so damned greedy, they might still be in business

They charge a ridiculous amount for coffee

[NRaleighLiberal]

17. Actually, their coffee price is fine....it is the fancy drinks that are overpriced. nt

[originalpckelly]

42. $4 dollars for a single Venti Chai Latte that's shit is not worth it.

Nor is it worth it for any other type of Chai. I'm sick of the crap. Chai is just a type of fucking tea, it's not that special to be charging so much for it. And the shit's not even fresh anymore, it's pre-made.

[girl gone mad]

53. uh..I think they are still in business.

Last I checked, there's about ten of them within a mile of my house, and I'm in a pretty rural area. :P

[maxsolomon]

3. since he sold the sonics to OKC republicans, i'm hostile to his company

but cutting underperforming outlets isn't going to hurt them.

[alfredo]

28. Look at it this way, now Sonics are their problem now. It's not always a

good idea to purchase a business outside of your core business.

[Kittycat]

4. They could start with one of the 5 we have in a 5mile radius (3 within the same block).

Of course it's worse in the city, but those stores are always packed.

[sdfernando]

7. Good!

Within a 1-mile radius of my house there are 6 Starbucks....SIX! Two are so close, you could walk from one to the other in less than 2 minutes!

They also have a penchant for placing new stores very close to (like across the street) older, well established, independent coffee houses. If the independents don't have a loyal customer base, they are out of business!

I hate Starbucks and will go out of my way to avoid them. If someone gives me a gift card, I'll pass it along to someone else....someone homeless if I see one.

Did I mention that I hate Starbucks???

[Lydia Leftcoast]

5. Reminds me of the scene in Best in Show, where the two yuppie dog breeders

met each other because they were sitting at the window of two different Starbuck's that were across the street from each other.

[blayne]

10. That was too funny.

[JackRiddler]

46. That was too accurate...

It's the story in New York, for example - they put Starbucks across the street from Starbucks in the hope of putting everyone else out of business.

[TlalocW]

11. There was also a scene in Shrek 2

When the giant gingerbread man is rampaging in downtown Far Far Away, he smashes the top of a "Farbucks," whose patrons run out screaming and then cross the street to go into another Farbucks.

Both are actually preceded by a Lewis Black routine complaining about two Starbucks directly across the street from each other in Houston.

TlalocW

[harmonicon]

18. where I lived in LA county, there was a starbucks in the parking lot of a starbucks

I'm not kidding. There was a minimall thing with a grocery store in it - one of the huge ones. Inside the grocery store was a starbucks. In another building in the minimall thing - a smaller one - was a starbucks. They couldn't have been more than 100 - 150 feet from each other.... same parking lot... hold on... thinking about that just gave me another aneurism.

[Indy_Dem_Defender]

64. 3 in one shopping center near me

1) Inside a barnes & Noble 2) right next door one inside a target, 3) while another one sits out in front of the shopping center.

[Barrett808]

21. "Better make it quick, kiddo. In five minutes this place is becoming a Starbucks."

"Simpson Tide"
http://www.snpp.com/episodes/3G04

[jmm]

36. It also reminds my of this scene from The Simpsons

I couldn't find it in English but it's just as funny in another language-

http://www.youtube.com/watch?v=mfYAdx-pTa0

[Virginia Dare]

6. I doubt anybody will ever even notice...

edited to add:

unless you work there of course.

[wtmusic]

8. Those union demands are doing them in

:evilgrin:

[sinkingfeeling]

9. Won't make me cry.

[maddogesq]

33. Nor will I. I like Carribou better. :) NT

.

[peacebird]

12. the economy is almost at a standstill and ready to go backwards. People are tightening their belts

They can no longer afford (or maybe justify) paying so much for a cuppa coffee.

As an aside - we went out to lunch today. The deli should have been packed, we normally (last fall) would have had to circle the lot to find a parking place. Today the lot was empty, and so was the deli. Same thing when we went out to breakfast with friends a couple weeks ago - got right in with no waiting at Cracker Barrel. Place was less than a quarter full.

People KNOW the economy is in the toilet.

[Hardrada]

24. I have stuff at an antique mall and no one's been buying

much there this month.

[redwitch]

38. me too.

business is awful.

[Hardrada]

44. Our weather here hasn't helped either.

When there is not an ice or snow storm it is 5 below zero!

[redwitch]

52. insult to injury

winter doesn't help at all. but the lousy sales started months ago.

[Lorien]

49. My eBay sales have tanked in the past four months

it's depressing.

[redwitch]

54. I haven't sold online in months.

it is depressing. we need a better economy really soon. a new president will really help consumer confidence! I know it will help mine.

[Hardrada]

63. I used to always be sending out a lot of things.

Sigh! Not for awhile now. My overseas sales have slowed too.

[Deny and Shred]

13. They beat estimates by a penny per share.

Revenue up $200 million. Business is good. As I read the CEO's statement, they are reducing stores with territories that overlap - cannibalization.

Stage one achieved - drive out most other competition in their targeted areas, so the people are hooked. Move to stage two - reduce the number of locations to maximize profits. They are precise, effective, and saddening.

I go out of my way to the local coffee house, and in general try to support mom & pop businesses. SBUX gentrification has closed a couple places that had been unique hangouts. Down with the corporate steamroller.

[Eurobabe]

14. Wow, you mean less morons are ordering double skim

moccachino soy lattes with a dash of cinnamon, hold the cream please?

[rayofreason]

39. No more.

For every store they close they will open 11.75 new ones!

[nbcouch]

15. All 100 stores being closed

are located in the bathroom of a Starbucks store. "Never mind cannibalization," said the manager of one of the "in-house" locations. "These stores are plain redundant. We get virtually no business. I'll be happy to move on to a shop that makes money."

[Ian David]

16. That's a venti-sized mess. n/t

[allisonthegreat]

23. lol n/t

[LeftyMom]

19. There are two within walking distance of my house, and they're building a third.

The market's flooded with nasty burnt coffee, they've driven all the good places out of business, and they're welcome to go into contraction mode at any time as far as I'm concerned.

[ninety lives]

65. We need our Starbucks....

Perhaps you live in the city, where they are ubiquitous.

Out where I live, those same "rules" don't apply.
Starbucks puts money in the local economy and helps stabilize the area.

We don't have too many "mom and pop" cafes.

Starbucks is one of the few places where people can hang out, do business,
use wifi.

Sometimes those so-called "mom and pops" are unwilling to invest in a diverse
area. You see those places in more affluent and "liberal" urban areas.
Starbucks is more like a McDonalds than a "mom and pop" cafe - they are often
found in suburban malls and heavily commercialized areas where mom and pops
can't survive anyway.

[Prisoner_Number_Six]

20. There's a Starbucks inside a Super Target I go to.

Just across the parking lot, perhaps 400' away, in the strip mall by the road is another Starbucks.

That's overkill AND bad planning in my book. :shrug:

[Demeter]

22. It's Called Duping the Franchisee

All these earnest entrepreneurs investing their life savings and being taken to the cleaners....

[Jansen]

25. Except there are no franchised stores.

But apart from that, yeah...

[Demeter]

32. Oh Yes There Are

Google Starbucks Franchise and see what comes up.

[Jansen]

48. Oh no! They're not!

"Oh Yes There Are

Google Starbucks Franchise and see what comes up."

http://franchises.businessmart.com/how-much-does-a-starbucks-franchise-cost.php


How Much Does a Starbucks Franchise Cost?

We get this question all the time "How Much Does a Starbucks Franchise Cost?" The answer to this question is very simple. Starbucks actually isn't a "franchise."

[girl gone mad]

56. You should have kept reading.

disclaimer: I don't know whether Starbuck's is a franchise or not, but your own link goes on to say:

Starbucks claims to offer a variety of flexible coffee and tea "programs" (or stores) for a variety of different markets. Some of these markets include colleges & universities, healthcare, hotels & resorts and existing restaurants. They also will consider qualified high volume or high traffic retail locations, so if you qualify for any of the above, it may be worth a shot inquiring about opening a Starbucks franchise.

If you do not meet the requirements to open a Starbucks, luckily there are many other coffee franchises giving Starbucks a run for their money. Maui Wowi and The Coffee Beanery are two of the many coffee franchises that are looking for franchisees. Click Here to contact a franchise consultant who can advise you on opening a coffee franchise.

If you are lucky enough to qualify to open a Starbucks, the company will provide you with marketing and merchandising that’s suitable for your specific location. Starbucks has superior customer service and product consistency, which gives customers confidence that their expectations will be met. Starbucks is without a doubt a great franchise to buy.

[KatyaR]

27. There's 6 with 4 miles of each other up by my office.

There's a standalone, then one mile north there's another standalone, then across the intersection there's one in SuperTarget, then one mile to the west there's one in Barnes and Noble, then a half-mile farther west, there's a standalone, then one more mile west there's another stand alone. So that's 6 in a little over 4 miles. Talk about overkill.

[Tight_rope]

61. Overkill is right!

They wanted to drive Stop-N-Go and 7/11 out of business.

[Liberty Belle]

26. My daughter just got hired to be a barrista; Starbucks was the

only place hiring around here besides Wal-Mart, and she refused to stoop that low.

[AllyCat]

29. Couldn't happen to a nicer group of coffee corporatists

Bad karma for not having fair trade coffee has caught up with them.

[rayofreason]

40. Except that they are growing.

Close 100 stores, but open 1175 new ones! Mom and Pop coffee houses are in the crosshairs.

[JBoy]

30. Vancouver has two Starbucks at the same intersection

Both are actually pretty busy. I tend to go to the one on the left.

[jmowreader]

31. I can understand this...

Would YOU want to cross this street just for a cup of overpriced, burnt coffee?

[Art_from_Ark]

35. Figures it would be Robson Street

I imagine they do a brisk business with the tourists

[RamboLiberal]

34. I think with tightening economy

Starbucks is a luxury some people are dropping. Last week Starbucks said they were going to test $1 coffee with free refills and I read today they are dropping the breakfast sandwich experiment. As others mentioned here they also suffer from overgrowth!

[rayofreason]

37. so the 100 stores to close...

are less than 1/11 of the number of new stores to be opened this year!

[Savannah_H]

41. Dunkin Donuts

Dunkin Donuts must have scared them off. Now DD has their own spicey coffee, made by no other than: P&G

[JVS]

43. Are they not franchised?

[JeanGrey]

45. Shit. I was hoping to get a part time job there sometime.

Starbucks has a rep for giving the best benefits to their employees even part time ones.

[JackRiddler]

47. So, like, am I supposed to feel bad because of the jobs?

Will it be treated like bad news when McDonald's shuts down a few thousand stores?

[davidinalameda]

50. Thank goodness for Peets!

I feel sorry for people who go to Starsucks

[SoCalDem]

51. And so it starts..

The last time I was at our shiny shiny mall, it was nearly EMPTY..Macy's had more clerks than customers..


The only places with any customers (that I could see) were the pretzel place & Orange Julius..

[JNelson6563]

55. The stuff from those 100 stores

will go a long way in reducing costs for opening the new stores. They are cannabilizing some of their stores but they doing it in the form of store closings gives them deniability.

Julie

[Le Taz Hot]

57. There are 3 Starbucks

all within 1/2 mile on the same street. I cannot fathom what business genius decided this was going to be a good idea.

[LeftHander]

58. Starbucks reducing opening by not opening new Starbucks inside existing ones....nt

[IA_Seth]

59. They are cleaning out an entire block!!

Stop the presses!

Seriously, market saturation can only be taken so freakin far.

[silvershadow]

60. Once these 100 stores are closed they plan to close stores in a second zip code.

[K8-EEE]

62. SO TRUE!!!! I can walk to four Starbucks from my house.

Plus, I have a drive-thru one by my freeway onramp (confession: I go to that one more than I should!)

[Orsino]

66. Notice what's missing from that story?

Any mention of employees or the word "layoff."

[bluestdogest]

67. You mean people have figured out that $4 or $5 is too much to pay

for a cup of coffee?