Login  |  Register          Free Newsletter Subscription
Zibb
Subscribe to Restaurants & Institutions
Email
Print
Reprint
Learn RSS

Closed Call

Starbucks’ plan to weed out 600 units is a drastic course correction, cutting across 44 states and altering the familiar routines of habitués from Birmingham, Ala., to Tukwila, Wash.

Patricia B. Dailey, Publisher, Editorial Director -- Restaurants and Institutions, 8/1/2008

Starbucks’ plan to weed out 600 units is a drastic course correction, cutting across 44 states and altering the familiar routines of habitués from Birmingham, Ala., to Tukwila, Wash. Fully 20% of the Seattle-based coffee colossus’ U.S. company-owned stores have been death-marked for quick demise. No restaurant chain in memory has marched forth so boldly when faced with a need to tamp down costs and restore a level of profitability that Wall Street unflinchingly demands. This newest round of shuttering, outlined in July, significantly ups the 100 stores that company founder and CEO Howard Schultz initially had on the hit parade.

Starbucks’ story has always played out larger than life, drawing attention that, at least early on, was so admiring that it verged on star-struck. And why not? Schultz had brilliantly hammered out a whole new segment, making the pursuit of foam-capped coffee aspirational for droves of Americans who came to believe that a life without double-tall lattes was a life barely worth living. Urged on by the call to goose up stock prices, the chain’s growth was as energetic as an overcaffeinated adolescent. As stores were added ad infinitum, industry analysts’ once-ebullient sense of awe turned first to raised eyebrows and then to a bitter blend of cynicism and scorn.

The call for growth at any cost began to dog Starbucks as soon as it went public, yet until the economy sputtered, any chinks in the company’s green-coated armor were buried in side notes. Missteps with too many new drinks and a fits-and-starts food program collided with miles-off-brand distractions—soft-rock CDs, book clubs and a strange foray into the movie business with “Akeelah and the Bee.” When a team is winning, though, strategies are scrutinized with less perspicacity; had boom times times continued, dissing on “Akeelah” would have been downright churlish.

Will paring 600 stores and 12,000 “partners” be enough to keep this once-venerable mermaid afloat? Hungry Howie can only hope it’s that simple. In January, Schultz resumed day-to-day responsibility for the company, and since then, he has brought out of mothballs other execs who helped build this seemingly indomitable brand. But even if he restores the dream team and brews up the mad-crazy passion that drop-kicked Starbucks to cult status, Schultz can’t control fallout from a faltering economy any more than he can reprogram the quirks of consumer behavior.

The Starbucks at which I was a regular patron closed quietly in June. Though sad, it was hardly surprising; the unit in Chicago, at 2475 N. Lincoln Ave., was an oddly shaped sliver of small with another Starbucks insanely close, at 2275 N. Lincoln. Thing is, I haven’t been to that one, or any Starbucks, since my haunt—the home of so many memories and caffeine-charged conversations—flipped out the lights as it bid me adieu. Habits, once established, can hold on tight, but bonds broken often stay that way—a truth that Schultz may not easily be able to remedy.

pdailey@reedbusiness.com

Email
Print
Reprint
Learn RSS

Talkback

We would love your feedback!

Post a comment

» VIEW ALL TALKBACK THREADS

Related Content

Related Content

 

By This Author

Sponsored Links

 
Advertisement
SPONSORED LINKS

More Content

  • Blogs
  • Videos

Blogs

  • Chris Muller
    Starters

    December 17, 2008
    Touch Your Customers, Build Your Brand
    In tough times like we are seeing today, it is more important than ever to consider branding as a source of competitive advantage. Brandin......
    More
  • Chris Muller
    Starters

    November 24, 2008
    Restaurants Matter
    Restaurants matter. To the macro-economy, to a local neighborhood economy, and to the micro-economy of just one customer making one purcha......
    More
  • View All BlogsRSS

Videos

Paul Prudhomme-The View from New Orleans
Legendary chef Paul Prudhomme takes a nostalgic look back at Crescent City dining before Hurricane Katrina. This proud ambassador for New Orleans also predicts the future of the city’s restaurants and how they will help rebuild the city’s stature and culture Watch It Now

View All Videos VIEW ALL VIDEOS
Advertisements





R&I NEWSLETTERS

Click on a title below to learn more.

Newsfeed (Daily)
eBurger eBurger (Monthly)
Recipes & Ideas (Twice Monthly)
R&I eMarketplace (Monthly)
R&I Beverage Briefing (Monthly)
Regional Cuisines (Monthly)
Noncom Niche (Monthly)
About R&I   |   Advertising Info   |   Site Map   |   Contact R&I   |   Industry Links   |   FREE Subscription   |   RSS
© 2009 Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.
Use of this Web site is subject to its Terms of Use | Privacy Policy
Please visit these other Reed Business sites