Wednesday, January 20, 2010

Starbucks U.S. sales signal return to growth

The light at the end of the tunnel has just gotten brighter. Starbucks coffee has been a powerhouse within the world of coffee. Ever since Starbucks opened, it has attracted coffee drinkers by offering high class coffee drinks and a relaxing place to sit down, read the paper, and enjoy a beverage. Even so, since the recession, Starbucks has been experiencing declines in their business. It seems that people have cut back the small, day to day spending on items such as a $4 coffee in the morning to jump start their day.

Although now, Starbucks has just recorded their first quarterly rise since September 2007. This is a great indicator that our economy as we know it is finally beginning to rise. In addition, US restaurants that are open 12 months out of the year, have shown a 4% increase during the end of the quarter in December due to the new Via instant coffee, increased prices, and holiday specials. Starbucks also cut 900 stores within the US and and forecasted a range of $1.05-$1.08/share which is an increase in roughly 30%.

Having a business like Starbucks show an increase, allows for some hope that the end is near.

http://news.yahoo.com/s/nm/20100121/bs_nm/us_starbucks;_ylt=AhnDQNvIdYvE9EG6TzTglezv5rEF;_ylu=X3oDMTJqdmdjcGl0BGFzc2V0A25tLzIwMTAwMTIxL3VzX3N0YXJidWNrcwRwb3MDMTUEc2VjA3luX3BhZ2luYXRlX3N1bW1hcnlfbGlzdARzbGsDc3RhcmJ1Y2tzdXNz
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3 comments:

  1. John CarlsonJanuary 21, 2010 at 1:44 PM

    Starbucks has struggled with business for a while. Originally, the idea of Starbucks was to re-create the Italian coffeehouses in italy, where people can sit around and enjoy a premium coffee. Starbucks is losing sight of that vision, considering there are now Starbucks starting to open up in the back corner of grocery stores. It's difficult to enjoy a coffee in the grocery store. People are more focused than ever on convenience, and Starbucks is becoming less convenient. Lines build up due to the time it takes to make the specialty drinks. Some people would rather grab a quick cup of coffee at McDonald's than wait in the line for an expensive coffee. Starbucks is trying a new approach, by opening up Starbucks to be more community based, rather than all Starbucks being identical. This may produce some variety and people will feel more connected with their local Starbucks.

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  2. John CarlsonJanuary 21, 2010 at 2:15 PM

    Here is a link to a recently posted article in the NY times to follow up on my comment:

    http://www.nytimes.com/2010/01/21/business/21sbux.html?emc=eta1

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  3. JohnnyJanuary 23, 2010 at 11:05 PM

    Agreeing with John, Starbucks has struggled around the world. Take Australia for instance, back in 2008 Starbucks closed 61 of 85 stores nationwide while simultaneously closing 600 US stores, resulting in an estimated loss of 12,000 jobs to Starbucks employees in the United States. Starbucks' expansion to Australia was handed a heavy defeat by small Australian cafes in "the fight for a nation's taste buds across the country."

    But following along with Scott's remark about observing the increase in Starbucks provides hope to many as companies do better in both the private and public sector, more will start to hire. Then sooner or later as this "recession" has more or less returned to normalcy, the unemployment rate will start to decline with a growing job market by the second to third quarter of 2010.

    http://news.bbc.co.uk/2/hi/7540480.stm

    http://www.pajamadeen.com/business-news/why-starbucks-failed-in-australia

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