Mar 21

Later, Latte.

Guest blog written by Ted Birkhahn.

Full disclaimer: I am a recovering Starbucks addict.  Every day on my walk from Grand Central to ourStarbucks
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.