Starbucks Strategy Incites Many Articles, Many Clever Headlines

"Ooh, that smell" proclaims the Forbes.com article on Starbucks' plan to remove warm breakfast sandwiches from the menu. The strong smell was taking away from the aroma of coffee, the company's bread and butter (so to speak).

There were other instant classics after the coffee giant announced its restructuring plan: "Starbucks Stinks," "Starbucks Expansion is Losing Stream" (a coffee pun rather than a sandwich pun?), and "Overhaul, Make It A Venti."

The New York Times could only come up with, "Starbucks to Close Stores and End Sandwich Sales." I guess they leave the bad puns to the sports writers. More from the Times on Starbucks' store situation:

Mr. Schultz also announced that his company would close 100 underperforming locations in the United States while scaling back the rate of store openings domestically. At the same time, Starbucks will move more aggressively to open stores overseas, where business remains robust. He did not identify the locations that will be closed.

In all, Starbucks will open 1,175 restaurants in the United States this budget year, down from its previous goal of 1,600. The company will open 75 more stores abroad than originally predicted, for a total of 975.

Much has been made about McDonald's entry into premium coffee market and how that would impact Starbucks, but the company's same store sales had already slowed -- down 1% in the U.S. last year.

Regardless of the new competition, Starbucks was in need of a change. It is time for that step that former growth kings tend to take: Go back to their roots.

The company is testing $1 cups of coffee (including refills) in Seattle. Hmmm.

Interesting note: CEO Howard Schultz said the company will not report same store numbers during the turnaround ("at least temporarily," as the Times put it).

Comments

[josh]

Having worked at starbucks during my undergrad years, I can say that most stores are crowded behind the counter, and a huge warming oven might not be the best use of space. This is to say that for the additional $100 worth of sandwiches sold, each store might actually be reducing overall efficiency. Some might not think this is a big deal, but at 7am, two or three additional people in line can often make the difference between sale/no sale.