NYTimes reports:November 16, 2007 - Price Rise at Starbucks Cuts Visits and Shares
Starbucks, the world’s largest chain of coffee shops, lowered its profit and sales forecasts yesterday after reporting its first decline in customer visits.
The shares fell more than 7 percent in after-hours trading.
The forecast revisions suggested that Starbucks was losing customers to McDonald’s and Dunkin’ Donuts, where a cup of coffee may cost $1 less.
“Starbucks is saying what the rest of the U.S. is saying, that the consumer is getting hit,” said James Walsh, who helps invest $1.1 billion at Coldstream Capital Management in Bellevue, Wash. “They’re not immune.”
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For some reason I never caught the Starbucks bug. Statistically I should have been target zero for their appeal. If I want a cup of coffee I deliberately bypass the chain on price alone. Does anyone remember Casey's daily rewarding himself to the tune of about $2000/year in latté and bisquiotti? My teens however... that's a different story. They don't seem to understand the marketing or cachet the brand has established. Why should they question $4.50/cup when that's what they've always known? I can admire the company and question the value. Now it turns out that I may not be so different after all. There is hope for the American consumer.
60 comments:
FIRST!
I kicked the junk years ago.
Murrst! $4.50 per cup of coffee? That sounds like a great deal. After all, I pay almost six dollars for two pounds, seven ounces of Folgers. But then I am not sophisticated like everyone else. [sarcasm]
For $5.40 I get a large Americano and a great breakfast sandwich. Much better than McDonalds. And since going to a coffee shop for breakfast costs $12-15 any more it is relatively cheap.
I have been splurging on BocaJava.com
12.58 a pound.........When they give free shipping I pop for it.
GOOOOOOOOOOOD stuff. The dark roast Light up Las Olas"
http://www.bocajava.com/showProductDetail.do?productId=135&catalogId=38
Does anyone remember Casey's daily rewarding himself to the tune of about $2000/year in latté and bisquiotti?
I recently ordered a Venti Vanilla Creme Frappucino... put it on plastic, of course, since I have only ten bucks to my name. Anyway, I was over my credit limit, and ignored the bill as usual.
So a $7 drink + $39.95 overlimit fee + $39.95 late fee + $2 finance charge came out to a nearly $89 cup of coffee. Sweet! What do I care, though, I have no plans on paying my bills...
tracking Casey Serin beyond the control of Casey Serin.
I never understood the allure of starbucks™ though I like coffee. I buy my coffee beans at the local and brew it up myself. Not surprising starbucks™ is losing dough, as even the densest person realizes when the belt gets tight it is time to cut out luxuries. And the belt is getting tight, and will get tighter. The government will bail out all the banks who made terrible loans, and the people who took those loans and cannot repay, and the taxpayer will pay. On the one hand you have the speculators looking to move into in the rich class without any real work, and the banks who will float them a loan upon the backs of the workers. Disgusting really. I can only hope they all go belly up. The comical thing is that I am an average working guy who couldn't afford a house previous to this boom, can't afford one now, and my only hope is that the market busts, then I may be able to afford one. I believe that upper class will be happy when we have no middle class anymore. It will be interesting down the road. Many cultures have eliminated their middle class through taxes, misspent taxes, and such, and it has all ended badly. Leave it up to a post about starbucks™ to bring me down, and I was very happily drinking whiskey, too.
I got hooked on the strength of SBUX coffee but lately I've been turned off by its bitterness and have started avoiding them in favor of local and regional chains like Coffee Bean (very mild) and Peet's (super strong!). I love Dunkin Donuts coffee and unfortunately there aren't that many of them out West here. They manage to make their coffee rich without SBUX's bitterness. I don't like the way they put the cream in there for you instead of being able to do it yourself but it usually works out okay. Believe it or not, McD's usually has great coffee too -- always fresh and somewhat richer than your basic convenience store crap. Just don't eat anything else there.
BTW, most of the time I just buy the smallest size regular drip for about $1.60. I very rarely get any of the fancy stuff so the price isn't a big factor.
Old -
Here is an article on whiskey that will be depressing for you.
http://www.signonsandiego.com/news/nation/20071115-1457-confiscatedwhiskey.html
Good point on the middle class - it is on the way out. The days of Ozzy and Harriet are gone, it is now a luxury to have a single income family.
Around here (SF Bay Area) a lot of the working poor can't even make it on two incomes and need to get second (even third!) jobs.
Priced per calorie Starbucks is way cheap.
Those who partake daily of the specialty drinks are now prepared for the long hard winter before them.
could this be the nudge that starts the housing crash in the Pac NW???
What is next? People drinking water from a faucet?
Actually this helps explain US productivity being up last month. I guess nobody is standing around waiting for some coffeeboy to brew them up a cup of joe.
H.
who drinks a medium regular (in New England that is a medium cup of joe with 1 hit of milk and 2 sugars). but adds only Amoretto di Soranno for flavor and to protect agains chapped lips in the winter
There is no hope. Like the MEW discussion on CR yesterday, we should be looking for external constraints on consumer credit. The US consumer has proven it will spend every penny it earns, and then some.
The bastards pouring out that whiskey should be shot. That stuff has value. Idiots!
History may show a robust middle-class to be a temporary abberation post WW-II. The US has been coasting for a long time.
Target has Dunkin' Coffee 12oz for $4.99 or less. I'll splurge for that.
People are being forced for the first time in a decade to balance their household budgets. It will be a surprise to many. Wouldn't want to be a cruise line operator for instance. The next shoe to drop on the consumer is credit card contraction. Expect tighter limits, tougher terms, higher rates, etc.
In five years Casey could have instead bought some sweet submerged real estate.
If the middle class does disappear, be sure to be on the correct side of the rich / poor divide.
Best way it to be born into it. For those of us who failed (miserably!) at that, the best way to up the odds is education. Caveat on that - I mean something USEFULL. Don't let your kids be Philosophy majors, they'll STILL end up working at SBUX.
Wait, you mean people don't want to pay $17.50 for an extra-super-tall (8 oz.) mocha frappucino? At least in Washington they still do, and the only significant challenge to Starbucks has been from enviro-friendly Caribu, although Dunkin' has just recently started moving into the suburbs.
I drink milk, though. Some people think drinking milk will make you put on weight, but I've been drinking Whole for years (only because I can't find the unfiltered stuff) and haven't put on so much as five pounds. I want my money back.
Why in the hell would you want to go to SBUX when you can buy whole bean Sumatra from Peets for $12/lb?
Now with this kind of discount who cares about inflation and recession ???
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@Property Flopper
I read that article. It is a damned shame. What is comical to me is the local government is perfectly willing to destroy what they could sell.
one for Akubi:
username: akubi
password: bang486!ship
http://happyfuntime.oldnumberseven.net/
People don't have money. They cut back on coffee. What is so hard to understand about that? The money is likely going into the gas tank. Did anybody read this anywhere?
The lessons of philosophy: being poor helps. You don't easily waste money, which develops many good habits.
Finally, if the perpetrators are unwilling to follow the law, what makes you think they would hesitate to label poison as 100 year old Jack?
I do not buy my coffee oon the go. I have it at home or at work where I can make it and if I want a decent cup I can make on with Costco's Kirkland brand (which is Seattle based, and they know coffee up there). It is columbian dark roast comes in a 3 Lb. can and costs $6.00 for the can. It is cheaper than folgers and taste great. I am so cheap that when I squeeze a penny, Lincoln's eyes bleed.
From Ben's Blog-
The Camarillo Acorn. “A slumping housing market continues to hurt Camarillo’s otherwise healthy economy, according to a recent report released by the University of California, Santa Barbara Economic Forecast Project.”
“Economist Bill Watkins told the 150 attendees the nationwide decline in home sales is ‘hammering California’ and having an impact on Ventura County, as well as Camarillo.”
“In September 2005, 800 homes were sold in Ventura County. That number dropped to a little over 600 homes in 2006 and then dipped to 300 in 2007, the economist said.”
“Watkins said 30 homes in Camarillo were sold in September 2007, an 80 percent drop from the 150 homes sold during the same month last year. Camarillo median home prices dropped from $625,600 in 2006 to $555,000 this year. Median home values are expected to drop again in 2008 to about $525,000, according to the report.”
“‘The decline in real median home prices combined with an increase in average salary will help make Camarillo a more affordable place to live,’ Watkins said.”
My coffee is a rotating variety of Dunkin' Donuts Medium Roast pre-ground vacuum sealed home brewed, Kirkland (Seattle's Best?) whole bean single source both home ground and brewed and an occasional retailer. McDs is decent and fairly priced and fresh but uninteresting. Peet's and CB&TL both quality but variable. None of this is criticism.
Technologically there is opportunity here.
Camarillo will never be affordable. I wasn't affordable when it was scattered hillside enclaves and a few ranchos. It wasn't affordable when it incorporated as a bedroom community for other local cities. it wasn't affordable when it rocketed upscale for remote commute accessibility.
Median on the down is as unreliable as median on the way up. Watkins is right but only because houses have stopped selling. We will see some "strange" medians in the next two years as higher end new projects sell for 1.5x the median despite their old values being 3x the median. That's not a price increase.
Likewise any household income average wages are most likely to be distorted as asset rich residents cash out not because any particular family is earning more.
@Lost Cause said:
Finally, if the perpetrators are unwilling to follow the law, what makes you think they would hesitate to label poison as 100 year old Jack?
Well, then dump it into the fuel tank of a generator somewhere. Waste not, want not.
" At 9:57 AM, Rob Dawg said...
History may show a robust middle-class to be a temporary abberation post WW-II. The US has been coasting for a long time. ....."
I don't know. Certainly a credit drunk middle class is probably already history, and just doesn't know it. My 50's and 60's grandmother (postmaster) and grandfoather (driller) were middle class, but to my shiny new suburb glare eyes, they looked poor. Neither used credit in any sense. Ever. Now that I look back at it, they were middle class. Definitions will change, the middle will indeed squeeze.
Love the Starbucks. Don't like paying the money every morning though.
Been hanging out in Portland lately. Seems that the real estate marking is showing quite a few of the same signs as Sacramento from a year or so ago. One home builder, Buena Vista Custom Homes, is going to auction off 230 homes next month. Apparently they're having no luck selling them but the owner of the company understands that he has cut his losses.
Don't forget Gevalia. You know, the mail order coffee of the month club where they give you a free coffee maker when you sign up. Great coffee and convenient. I've been a subscriber once or twice in the past. I usually end up with so much coffee I put a lot of it in the freezer where it keeps a long time, or I give it to friends.
The lessons of philosophy: being poor helps. You don't easily waste money, which develops many good habits.
No kidding. I shouldn't mention (but I will) that I've been known to hang onto a Starbucks coffee cup for DAYS in order to take advantage of the .50 refills. I sometimes re-use the same cup three times in three different branches all over town. One time I bought a cup of coffee in L.A. in the morning, drank it, kept the empty cup on a flight to the east coast and bought my .50 refill in Boston in the afternoon.
You're technically not supposed to do this (rules state refills must be within 1 hour and in the same branch) but I've only been called on it a few times and I plead ignorance.
Starbucks...eh, it's alright.
Ditto for the Daily Grind.
Dunkin' Donuts, for the dollar, the best and themost out there.
I buy a tall "bucket" of it north of Winchester and it lasts me until Richmond.
Too bad their doughnuts are fucking animal feed, though.
Krispy Kreme...God's Own Doughnut, but their coffee is plonk.
Store bought: Yuban and Chock Full o' Rats and Luzianne,(I'm from N'awlins, and still have an occassional "chicory-jones".
Folger's & Maxwell House passable when fresh, and truthfully not bad for mass-market bilgewater.
Hills Brothers and Marlboro coffees...absolute shit...good only for cleaning industrial machinery.
BTW, odd factoid.
My mother worked at a coffe-roasting plant that had supposedly employed Lee Harvey Oswald. Everyone knew it was bullshit, since Payroll had him working in the roasting rooms.
In early 1960's Louisiana, no white man worked there.
This coffee thing offers a point I'd like to make. I recently drank coffee at the Hilton in Florida and it tasted like crap. I realized it was the tap water. I don't care what kind of fancy shmancy coffee you use, if the water is crap it tastes like crap. The end. Folgers + Aqua Fina is better than SBUX + Florida tap water, IMO.
Good point on the middle class - it is on the way out. The days of Ozzy and Harriet are gone, it is now a luxury to have a single income family.
Indeed, the powers that be had it planned just this way. The goal as ever is the enslavement of our people, and the destruction of those who dissent. Some suspect they may have overplayed their hand this time. Just look at the deliberate cultural degradation we are forcibly subjected to on a daily basis. Some folks are waking up and stocking up on necessities like Ron Paul gold coins and 30.06 ammo for when payback time comes. And it could be a doozy.
Hi metro!
My coffee fav is 'Santa's White Christmas' made by Barney's Coffee.
and
According to a taste test on Good Morning America performed "live" by their expert taste panelists,
'Chock Full of Nuts' is the best tasting and my every day brew.
My 2 cents.
No Pun on The word Barney Edgar.
he he
...I've been known to hang onto a Starbucks coffee cup for DAYS in order to take advantage of the .50 refills.
Hehe. I just mentioned this to my wife, who said, "That's crazy. Refills ought to be free."
Pleather Murse
You should go with someone else (spouse?) to Starbucks, order a coffee, sit down and share it, then get a refill to share.
That would be tight!
You should go with someone else (spouse?) to Starbucks, order a coffee, sit down and share it, then get a refill to share.
Nah, makes me too jittery at this time of night. I like to maintain my calm, laid-back demeanor.
Maybe I need to visit the medical marijuana dispensary down the block.
Do they have $0.50 refills too?
I agree with Mark that Peets is far superior and less expensive than Starbucks, but aren't they owned by the same conglomerate now?
However, I rarely drink coffee any longer given the volume, distance, CO2 and entropy involved in the process.
While tea is not produced locally, a little goes a lot further than coffee so I stick with that now and feel better in the process.
I boycotted tea from China due to their passive support of Burma's junta and now I'm planning to boycott tea from Japan due to their slaughter of whales and dolphins - India is a possibility, but they were also passive supporters of Burma's junta so I guess I'll just have to take better care of my camellias and harvest them.
@FMW, other than the amusing name I think 'Chock Full of Nuts' kind of sucks.
BTW Old the password doesn't seem to work...
At 10:52 AM, Old said...
one for Akubi:
username: akubi
password: bang486!ship
http://happyfuntime.oldnumberseven.net/
Personally, I find doughnuts suck whatever the source.
Sorry about that Akubi, It will work now. Like Casey, I spoke too soon.
Peets is an independent, public company (trading symbol PEET on Nasdaq). Although I am not a coffee drinker, I am a long-term investor in PEET. Unlike Starbucks, Peets' growth prospects still look good.
I see that Snowflake pulled his new site down already.
Personally, I find doughnuts suck whatever the source.
++++++++++++++++++++++++++++++
I hear you, Akubi, you like tea.
::::sips coffee:::::
But, RE: donuts, they are on the Top ten worst foods list, in there with hot dogs and pop corn. Never touch the stuff (except home made air popped pop corn with real butter, salt and cayenne pepper, yummy).
PS: Isn't coffee for closers?
@ Egar,
RE: Florida tap water, IMO. You're right!
But we have water.
lol
Turdflake is PASSIONATE about blogging
So much so that he took his blog down
@ Egar,
RE: Florida tap water, IMO. You're right!
I meant to ask you about that. Ours tastes off too, but in a different way. I'm sure it's fine, just a little funky tasting.
But we have water.
Yeah, unlike some, ahem, beggar / borrower / stealer neighbors to the north? {Georgia!} I get the grift, I mean drift. I hear some of our supposedly green neighbors to the west want to steal water from the great lakes too. Bastidges! ;-)
@Akubi
Found this USA-grown tea. Maybe you should be our guinea-pig & try some. Stephanie J - are you out there?
I myself am a tea barbarian. Sometimes I need a hit (after drinking the whole coffee pot). So I have some Tetley "Classic Blend" in microwaved water, no sugar, no milk.
You guys realize the entire conversation would read as equally true if we substitute housing for beverages?
My God, I left only one sarcastic comment on Casey's new blog.
Which new blog? I have honestly lost track.
Starbucks?
*hurl*
Large regular please!
@Old,
Thx, that's quite a collection!
@Smart Dad,
Good to know.
@FMW,
I hate hot dogs and bad popcorn too. I don't even like tofu dogs that remind me too much of hot dogs.
@Wagga,
Unfortunately, it appears they were bought by Bigelow after that was written. However, they are offering some loose teas, but I don't see any green.
FWIW, I bring a thermos of home-brew jo to my job at a Fortune 500 co each day. We have a Starbucks in the first floor of our building, but I only use it if I need to meet with a coworker over coffee.
We make little sacrifices like this so that my kids will never, ever experience day-care. Never!
Rob
The Escape My House one
There's a nice selection of pretty good coffees at Pilot Travel Centers. Lately I've been getting the Colombian blend but occasionally I go for the Kenyan. It costs me about a buck and a half to fill my 64 ounce thermos. And usually they have Splenda too.
> You guys realize the entire conversation
> would read as equally true if we substitute
> housing for beverages?
SBUX is doing overpriced housing now? Damn, those guys are into everything. :)
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