Guest blog written by Ted Birkhahn.
Full disclaimer: I am a recovering Starbucks addict. Every day on my walk from Grand Central to our
office, I pass five Starbucks. Until recently, I always stopped in one of them and plunked down several bucks on a mediocre latte. Why? I loved the routine and the brand experience, not the taste of the coffee.
But, as the recession loomed and with daily reminders that it’s time to stop spending and start saving, I decided to put the skids on my Starbucks habit. At first, I tried to change my route to the office so I wouldn’t have to walk past a Starbucks but that didn’t work; no matter what route I chose, I was bound to run into one. So I decided to show some self-control and just go cold turkey.
Am I indicative of a trend that is sweeping across the nation contributing to the vanishing profits of the world’s biggest coffee chain? It’s hard to pinpoint why Starbucks has suffered. Did they grow too fast? Are their prices too high? Is the taste of the coffee just not that good? Did the brand – and the experience it provides – run its course? I suspect it is a combination of all these factors.
However, one thing is certain: If the U.S. finds itself in a prolonged economic downturn, Starbucks is a dead-man walking. Although it is making major changes to the way it makes, serves and sells its products, I believe the company is too big and cumbersome to dig itself out of the hole that it’s in.
Only time will tell what happens to Starbucks. In the meantime, I’m off to the kitchen to grab a free cup o’ joe.
Desperate times call for desperate measures. And, Starbucks sure seems desperate at the moment.
First, they sacked their CEO and reinstated founder and chairman Howard Schultz in the position. Then Schultz announces that the brand has lost its way and promises to close stores and re-focus on core offerings. Next, McDonald’s, sensing vulnerability, announces it will open 14,000 coffee bars and go mano-a-mano with the once unrivaled coffee king.
And how does Starbucks respond? It begins testing $1 cups of coffee in its hometown of Seattle. That’s right, the guys who dazzled marketing professors everywhere by convincing Americans to pay $4 or more for a cup of Joe, have blinked.
One can almost sense the panic that must be pervading the hallways of Schultz’s once-proud empire. Slashing the price of its coffee flies in the face of everything Starbucks stands for, and should give a monumental image and reputation boost to McDonald’s gamble.
The Starbucks move makes as much sense as Lexus suddenly offering a cheap, ‘starter car,’ Gucci licensing body tattoos or Zegna selling designer overalls.
These are the times that try men’s souls and now is the time for Howard Schultz to stand firm and hold the line on pricing and brand consistency.
Just once, I wish I knew for certain which foods, drinks, and lifestyle choices are, and will remain, healthy for at least a short amount of time.
One day, bread is bad. Then it’s good. Another day, aspirin is found to thin blood but raise blood pressure. Red meat is bad. No, it’s good. And, don’t get started on the incredible, edible egg.
In the midst of the turmoil created by certain foodstuffs being heralded as good one day and bad the next comes the remarkable news that a Brooklyn College study shows drinking four or more six-ounce cups of coffee a day reduces your risk of dying of heart disease by 53 percent! Holy cow. The same ‘Joe’ that makes your heart bounce around like a basketball in the hands of Steve Nash may actually be heart healthy? What’s next? A report that smoking two packs of cigarettes a day will not only clean and strengthen one’s lungs, but forestall certain types of cancer?
BC’s counter-intuitive finding has to be huge news for Dunkin’ Donuts, Starbucks and other purveyors of the powerful, little caffeine bean. But, the whole thing leaves me scratching my head. I know when I’ve reached my caffeine limit. And four is two too many.
Put four cups down my hatch and you’re looking at a category five hurricane, a 9.0 earthquake on the Richter Scale and a world-class Nor’easter all rolled into one.