It was very ironic that this morning I originally planned to get a cheap breakfast at the nearby 711 convenient store, but was hounded by the distance and convenience of a Starbucks branch located at the ground floor of our building. Location. Location. Location. Have you ever wondered the mushroom effect of Starbucks versus those of 711 stores, granted that Starbucks is really not your one-stop practical coffee chain? Unbelievable and yet they have clinched their place in the market that it's not surprising to find two Starbucks branches in one block. Starbucks kind of resembles a life or oxygen station where people could refuel. It creates the impression of being a need rather than a want.
As I began to trot down my lazy butt, I saw a report in marketwatch.com that tickled my fancy, and yes it's about Starbucks.
We all know that Starbucks is an all-American brand, and America right now is not faring economically well. They are at their trying times, specifically on the way to recession and consumer spending in the states currently adopts a sluggish pace. As the globe feels that the biggest financial and consuming nation in the world is having troubles, I guess it would be an understatement to say that Americans are the ones who immediately feel the backlach of their trigger happy consuming country. They are now being haunted by their power and excess, and what better way to illustrate the unfortunate chain of events, than to illustrate the effects through their popular brand, Starbucks.
According to marketwatch.com, Starbucks profit slows as US business weakens. The report was made by Matt Andrejczak. In his report Starbucks said that it will close 100 under-performing US stores, or roughly 1% of its current coffee shops, by the end of September. The new strategy that by reducing the number of openings, they would be able to optimize their resources and reduce cannibalization of existing stores.
They have tried to emulate different businesses like what fastfood chain does by offering food, breakfast meals and such, but their price is quite unappealing to that of McDonald's, which is by the way already entering Starbuck's turf in providing good coffee with sandwiches at a very low cost. Starbucks has to rethink and adapt through the times.
As of now, we have to wait Starbuck's new strategy as it would unveil five major consumer initiatives on their March 19 annual meeting. I wonder what Starbuck's would do to fight this US economic meltdown, that's for us to find out.
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