Summer fun food and drink – Starbucks in decline chapter two

Starbucks coffee on life support“We are immune to economic ups and downs!” At the dawn of the 21st century, that has always been the bleat of the Starbucks upper Echelon.

While most restaurants feel the squeeze in hard times, as consumers stay home for more Mac and Cheese, Starbucks’ Vente-latte-sipping well-to-dos will keep coming back for more. Or so the economic theory dictates.

Truth is – luxury brands attract premium customers who are less sensitive to economic swings. Better job security and more income to ride out the lows. “When Starbucks continued to rack up impressive gains through 2002 and 2003, analysts went so far as to label the company “recession-proof.” Like the Titanic I suppose.

The past few years have seen a multi-faceted rebuild and re-branding of the Starbucks mission. In its insatiable desire for unchecked growth, the company automated too much of the artistry once known as specialty Coffee. Out with the La Marzocco manual machines – and in with robotic coffee. Starbucks as a therapeutic “alternative – not the home not the office space” for its customers, has given way to drive-through windows, interstate off-ramp kiosks and questionable reconstituted greasy breakfast sandwiches and Cd shills.

Two sucker punches come along. Overbuilding and under-training, and coffee that suffered – even to my grizzled taste buds. As people became more educated about what a real coffee should taste like (thanking Starbucks in the 80’s): consumers sought out the mom-and-pop coffee shops (in the U.S. up 40 per cent to 14,000) — with an seemingly endless cortège of thirsty Starbucks refugees.

During one of its costume changes, Starbucks has attracted a new type of customer, one drawn to the fashion statement of the specialty coffee experience, but lacking the requisite bling to sustain a daily double-tall Vente Macchiato habit.
So, the U.S. housing market collapses – a threat of layoffs, these lower- and middle-income Americans are forgoing the to-go cups. Caramel lattes or a a gallon of gas? Gas wins.

They wanted to win everyones heart in order to sustain their growth – and have ended up leaving us with a caffeine withdrawal induced headache – that isn’t going away anytime soon.

Remember this? Chairman Howard Schultz once said coffee drinkers who try out cheaper competitors will upgrade to Starbucks.

“Those consumers over time are going to trade up. They’re going to trade up because they are not going to be satisfied with the commoditized experience or the flavor,” he said.

Your right Howard. We got sick of the flavor. And we moved on.
Thanks for the memories.

Listen here for our radio interview today… Flash thingie below – if you cannot see that, click here for the mp3.