I gave up caffeine for Lent and not once did I set foot in my local Starbucks (Alhambra Boulevard and N Street) near my work. While I was gone was this big news item about them shutting down for a few hours and getting back to basics. All I've noticed is the high turnover....I only recognize 2-3 employees since February. Oh well...at least is sounds good. :?
I haven't read anybody commenting on Pike's Place roast at SBUX as yet. In Maine they've been pushing pretty hard to get it going. Bear in mind, this region typically resists dark roasted coffee and heavy brews. That's why Dunkin Donuts does so well here.
I've had three Pike's Place cups, and have decided that I should stick with Verona or whatever they have on the go besides Pike's Place. I won't try to critique the coffee here, but suffice it to say they've moved a long way toward what is served at McD's. More like Green Mountain than Starbucks.
It's solids are a lot lower than a typical Starbucks brew. Mouth feel is totally different. I understand that "Light Note" began in New England. This is much lighter than Light Note. On their http://www.starbucksstore.com/products/ ... SKU=743105 page, they describe it as "Bold". Not.
On the topic at hand, I personally do believe the letter. I know several people on the corporate side and they say changes are real. The philosophy is consistent with the letter. I think it's funny how people can spend so much time dissecting an email. It's kind of like the way financial analysts used to parse every word uttered by Alan Greenspan. Funny.
From "The Gourmet Retailer" I picked up this linked article.
Starbucks Halts New Store Openings
May 2, 2008
Starbucks said on Wednesday it will open fewer than 400 new stores in the U.S. annually beginning next year and running through 2011 as it adjusts to slower U.S. growth and turns its focus to expanding newer international markets, Reuters reports.
The company, which warned last week of the worst economic environment in its history, blamed the domestic housing crisis for a significant quarter-over-quarter deterioration in U.S. customer traffic and said it saw early signs of a potential traffic slowdown in the United Kingdom, which may be related to economic problems there.
Chief Executive Howard Schultz, brought back in January to lead a turnaround of the company, continued to dismiss fears that Starbucks was overbuilt or that new competitors like McDonald's Corp were stealing customers with coffee drinks.
The U.S. mortgage meltdown was leaving customers less to spend, he argued. "We strongly believe it is not the competition ... We don't believe that we've saturated the market, but we do believe that we have a head wind the likes of which we've never seen," Schultz told analysts in a conference call.
Wall Street was lukewarm to the company's pullback in new openings. "It's not really surprising that they've slowed their store growth. The fact that they are making plans to slow it is certainly better than what they were telling us before," said John Langston, an analyst at Hodges Capital Management.
On Wednesday, the coffee shop chain posted fiscal second-quarter net income of $108.7 million, or 15 cents per share, compared with $150.8 million, or 19 cents per share, a year earlier.
Results from the most recent quarter included restructuring-related charges of about 3 cents per share.
The company last week warned that the results would be weak. Prior to that, analysts had been looking for a second-quarter profit of 21 cents per share. Wednesday's results matched lowered estimates, according to Reuters Estimates.
Total revenue rose a smaller-than-expected 12 percent to $2.53 billion after sales at U.S. stores open at least 13 months fell in the mid-single digits.
Starbucks' U.S. stores delivered 77 percent of total revenue and experienced slower traffic during the quarter.
Starbucks is bracing for its first full-year profit decline since 2000, forecasting fiscal 2008 per share earnings that are somewhat lower than the 87 cents reported last year.
Nevertheless, it is forecasting accelerating earnings for 2009 through 2011.
In a bid to improve its fortunes, Starbucks said it planned to reduce its fiscal 2008 U.S. store openings to 1,020, the second decrease this year.
When founder Howard Schultz returned as CEO, he cut the company's fiscal 2008 store openings to 1,175 from 1,600. The company opened nearly 1,800 stores in fiscal 2007.
Under the new plan, U.S. company-owned and licensed store openings would be limited to 400 per year in 2009 through 2011, while international openings in those years would range from 1,050 to 1,300.
Schultz in the past has said that the company, with its coffee drinks that can easily cost $4 each, was virtually immune to economic weakness.
On Wednesday, he specifically linked its woes to the U.S. housing crisis, saying it has been hardest hit by foreclosure leaders California and Florida, which account for about one-third of Starbucks' retail sales.
"Starbucks coffee and premium coffee experience has, over time, been an affordable luxury. And at this time, it isn't for some people," Schultz said.
