Hopeful Romantics

Just about everyone now knows Starbucks has taken it on the chin, lately. According to a recent Los Angeles Times article, to name a few, Starbucks reported a loss of $6.7 for the third fiscal quarter. That’s a lot of beans. Additionally, Starbucks is closing 600 under performing stores.

I am not sure what the mystery is here. If you overextend your brand and start putting up a Starbucks one right next to the other, sooner or later you will either oversaturate or people will grow tired of looking at you. It is like showing up for a party in the same dress. Dazzling for a minute, and then, doesn’t she have anything else to wear?

The other thing is the expense of the coffee. As the comedian Jackie Mason reports in his hilarious piece on the Big Green Coffee Phenomenon, they serve a pretty expensive cup of coffee. With the economic downturn, and the price being what it is, people started to go elsewhere. To Dunkin’Doughnuts, for instance. Or MacDonald’s, where they now serve a premium cup of coffee. Hopefully, it is not too hot. Even Starbuck’s admitted in some significant way there normal brew is pricey. They started offering plain old plain old coffee at a lower price.

My friend Harris called it first. He got his two cents in long before all the pundits and predictions. In fact, some of the great stock tipsters and economic forecasters were predicting that Starbuck’s stock was going to rise as it spread its franchise to foreign shores. Not Harris. He thought it was a bunch of baloney. People he said, in tough times, are not going to stand in line and spend that dough for what he categorized as burnt coffee. Ain’t happening.

He was right. Starbucks should have gotten smart early and sat down with Harris and asked him his thoughts. They could have paid him for his consultation. I know this. It would have cost them a lot less money.