It was bound to happen.
In the next 12 months, Starbucks will be closing 600 locations nationwide.
Are you surprised?
I'm not. Right now the average price of gas in the country is $4.09 per gallon. This leaves many people in the country asking this question: "Should I get enough gas to drive to work today or get a White Mocha from Starbucks?"
People have been cutting back and I have no doubt that Starbucks was the first thing to get rid of on their list. I know it was for me. Starbucks lost its sexiness to me over a year ago. One day it just wasn't as good as it used to be and my value equation changed.
Almost $5 for a 16oz cup of Starbucks or....spend $1-$2 more to get an entire meal from Chipotle or Chick-Fil-A? Starbucks used to be sexy, a fashion statement, and delicious too. It's stopped being all of those things.
The reality is, if all you're interested in is straight up coffee why are you going to Starbucks
anyway? Dunkin Donuts, Einstein's and Panera all have better plain coffee....OH and if you go to Dunkin they put cream and sugar in FOR you and it only cost $1.70.
Starbucks says they are closing 600 stores, many of which opened after 2006 and were placed next to current Starbucks. You know that place in your local city where you can stand in one place and see 4 Starbucks? It's also known as the center of the universe, however only now the one in the upper left corner most likely is closing.
The strategy that Starbucks originally had with their rapid expansion made complete sense in 2003-2004 when the world was bowing at their feet.
It was simple, yet genius. If they had a Starbucks on corner 1 that was making $3 million in sales a year they could easily open another Starbucks on corner 2 to capture traffic going the other direction, and would make sure it did $2 million in sales a year --- add the two together and you have turned a $3 million corner into a $5 million one.
Their marketing plan was to just open more Starbucks as it was obvious that if you weren't going to Starbucks on a daily basis, it just meant you didn't walk or drive past one.
It's obvious that it is finally occurring to them that they can't afford to keep both stores open and still have profitable areas.
Don't get too worried, there are still over 7,000 Starbucks locations in the U.S. But, will you be going to any of them?
Wednesday, July 2, 2008
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As an Apple Employee I think I am supposed to adore Starbucks, as most Apple personal do. But I must completely agree, Starbucks just doesn't do it anymore. From their lame kiosk in International Plaza to most other corner locations their service, quantity, availability, as well as general taste has literally been thrown out the window for what is an all to east profit. People don't even like Starbucks anymore. The only reason people go is because they still think its the cool Coffee, they want to feel hip and modern. Well, its not cool anymore!!!
ReplyDeleteI stop in once in a while but definitely not every day. We have free swill at work which can get one by when in need of a caffeine fix. And, when I'm feeling ambitious, will wake up earlier and make my own on weekdays for the train ride in. Weekends are a whole 'nother animal as I have good coffee in the cupboard.
ReplyDeleteBTW, your map looks a lot like it's pointing to the 'Bucks at 1675 Broadway!