A latte troubles for Starbucks......

[marmar]

Get it...a lat-te troubles? .... Thanks people, I'm here all week. :P



from MarketWatch:



Slowdown, restructuring costs batter Starbucks

By Matt Andrejczak, MarketWatch

SAN FRANCISCO (MarketWatch) -- Starbucks, in the midst of a restructuring aimed at blunting the effects of slower store traffic and a weak economy, reported a sharp quarterly profit drop late Monday.

In its fourth quarter, Starbucks earned $5.4 million, or 1 cent a share. Excluding charges to shut down stores and cut jobs, Starbucks said it earned 10 cents a share, below Wall Street's target of 13 cents, according to a FactSet analyst survey.

The Seattle-based coffee chain earned $158.5 million, or 21 cents a share, a year earlier.
Starbucks has spent the year taking steps to rejuvenate its business, including shuttering 600 stores and introducing menu items. The slowdown in the California and Florida housing markets and the rise in unemployment have damaged the previously highflying coffee chain.

For the quarter ended Sept. 28, sales rose to $2.5 billion from $2.4 billion.

Starbucks said U.S. sales at stores open at least a year -- or comparable-store sales -- fell 8% due to deteriorating traffic trends and a decline in the average transaction size. Same-store sales overseas were flat as traffic at U.K. and Canadian stores fell. ......(more)

The complete piece is at: http://www.marketwatch.com/News/Story/economic-slowdown-restructuring-costs-batter/story.aspx?guid=%7B7A6C7AEF%2DA0B4%2D4EA6%2DB26D%2D6B4B9AB691B1%7D

[bitchkitty]

1. That was the first thing I gave up - coffee shops. n/t

[Richard D]

2. For the price of a couple lattes

I can buy a pound of descent coffee.

[marmar]

3. True......I stopped going to 'Bucks for charred dirt water (tho the soy latte is good)....

.... and started buying my own Illy, Dallmayr and Whole Foods' Allegro coffees to brew at home: So much tastier and so much of a savings.

[joeunderdog]

4. Try making it affordable.

I enjoy their product, but won't pay the prices.

Lot's of people at work have recently joined the in-office $2/wk coffee club instead of spending $500-$1000/year on coffee at Dunkin Donuts. Simple math, big savings.

[NRaleighLiberal]

5. But - their coffee is not overpriced. it is the frappucinos and lattes (coffee milk!)

that make the tab add up. Also, Starbucks and Peets and other West Coast roasteries are serving a particular regional taste - dark roasted coffee. New England favors a very light roast (Dunkin Donuts coffee is like milky dish water to my wife and I).

One Kudo for Starbuck - the free coffee on election day - I went to three different stores (to recharge as I canvassed) and in all three the lines were out the door - the baristas in each said that the crowds in each store were endless and huge all day.

Tastes in coffee are like tastes in wine, beer, etc - very personal - one person's nirvana is another's poison!

[deepthought42]

11. Yup. I stick to their coffee

because it is all I can afford. I have a couple of free drink coupons I'll use on seasonal lattes. :) Though, VA sucks, because here in Roanoke there's a fucking 10% tax on my fucking cup of coffee! :grr:

Time to beg dad to reload the Starbucks card!

[curse of greyface]

6. I make better coffee at home. nt

[Lumpsum]

7. They might get more business if a cup of coffee didn't cost 6 bucks. nt

[deepthought42]

13. Here in Roanoke it's $1.82 for a tall

and that's with Roanoke's stupid 10% local tax...ug. Well...tea is cheaper...

[OneBlueSky]

8. as one who's never set foot in a Starbucks in my life . . .

don't care! . . . :shrug:

[FarCenter]

9. Restaurant beverages generally have a high profit margin

Margin on alcoholic beverages is generally greatest. However, with the trend towards healthier lifestyles, the restuarant business attempts to create higher margin on non-alcoholic beverages through strong branding and vigorous advertising.

Starbucks takes this to a pure play, focusing on coffee almost exclusively and avoiding the costs of food service.

However, branding maintains it cachet only so long, and with the decline in the economy, their concept is unlikely to survive with anything like its former profitability and ubiquity.

[lpbk2713]

10. Katherine Harris isn't around any more.

That might explain it. :eyes:

[seemslikeadream]

12. The reason MacDonald's is up

cheaper coffee

[surrealAmerican]

14. They are a victim of their own greedy over expansion.

There was never any reason they needed to be in every market in the country.

[bemildred]

15. Good, that means less over-roasted coffee, and less exploitation of coffee growers. nt

[NRaleighLiberal]

16. A better solution for those who are hobby oriented - learn to roast your own coffee!

Great green coffee beans are typically around 5.00 per pound, and with a 40 dollar crank popcorn popper and a coleman gas stove you can use outdoors, you can roast a pound of coffee in about 10-15 minutes that will be far superior to anything you can buy - including beans from the premium roasters at 10-20 dollars per pound! I've been roasting all of our coffee for nearly two years, and we are now completely spoiled...